1951-12-28

[Stage Direction]
On the orders of the day:
Mr. W. G. Blair (Lanark):: I should like to
direct a question to the Minister of Defence Production (Mr. Howe), but since he is not here I will ask it of his parliamentary assistant. Is it true that the Canadian government has placed orders for army clothing in Britain, United States or France?


Mr. G. J. Mcllrailh (Parliamentary Assistant to the Minister of Defence Production):: Mr. Speaker, I would think it is not true, but I had better check the answer and make a more detailed one. I may say that I have noticed that certain representatives of labour have been holding meetings in the constituency which the hon. member represents, and I assume that his question arises out of some of the statements made in connection with those meetings. If he will let the matter stand as a notice, I will get him full information and give a precise answer.



GLOVES AND OTHER TEXTILES


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to direct a question to the Minister of National Revenue. I asked a similar one earlier in the session. Is the minister now in a position to say what is being done to meet the unfair competition of countries behind the iron curtain, such as Czechoslovakia, shipping into this country gloves and other textiles to the detriment of Canadians?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, as indicated in my
statement on December 6 in reply to a question asked by the hon. member for Lake Centre, this matter was drawn to my attention also by a number of members as well as Canadian manufacturers, and it has been receiving our active attention for some time. An examination of the invoices covering these importations does not disclose any
evidence of dumping as defined by the customs tariff, but we are endeavouring to ascertain the values at which these goods are sold for consumption in Czechoslovakia. As you will appreciate, this is a somewhat difficult task but we have been in discussion with the Czech authorities with a view to satisfying ourselves as to the proper values.
As I indicated in my previous statement, there are great difficulties in getting the type of information which we should have in order to determine whether or not dumping actually exists. It is true that there are fairly large importations from Czechoslovakia which act to the detriment of our Canadian manufacturers but, according to-the law, the customs tariff, we must determine whether or not goods are being dumped; and the matter of determination is one of price and not of quality. We attempt to get the fair market price in the country of export and to see how that compares with prices under similar conditions in our own country.


John George Diefenbaker: I thank the minister for
his reply. Is it not a fact that the United States has found it necessary to act in order to protect the Americans from this kind of thing?


James Joseph McCann: I understand it has, Mr. Speaker; but I do not know whether that is done for economic reasons or for political reasons.


Mr. Graydon:: If those reasons are good
enough for them, they should be good enough for us.


Some hon. Members:: Oh, oh.



STRATEGIC CHEMICALS


[Stage Direction]
On the orders of the day:
Mr. George A. Drew (Leader of the Opposition):: I wish to direct a question to
the Minister of Trade and Commerce (Mr. Howe) or to whoever can speak for him in this matter. There has been an extensive discussion in the press of the charge made by the commerce department of the United States that the Continental Pharma Company of Montreal has been secretly exporting strategic chemicals to communist Hungary. I should like to ask what information the government can give us about this matter

Inquiries of the Ministry and what steps have been taken, from the point of view of the Canadian government, to deal with this situation.


George James McIlraith: Mr. Speaker, I have not had notice of the question, so I cannot give a full answer at this time. I noticed the reference in the paper yesterday, and as I understood it, the action taken in the United States was based not on the fact that they were secretly exporting them, but rather that these exports were carried on contrary to the export regulations of that country. The matter of whether or not any exports had been made from this country was being examined into yesterday. I have not full information, and I cannot give any further useful information at the moment. If there -is anything that can be added I will bring it forward.


George Alexander Drew: Since the parliamentary assistant is taking this as notice and will be making inquiry, I would point out that the opening paragraph of the Associated Press dispatch on this subject reads as follows:
The Department of Commerce said today a New York exporter, a Canadian and a Belgian firm have been ordered barred from U.S. export trade for secretly shipping strategic war chemicals to communist Hungary.
That is the quotation from the Associated Press dispatch, and I am merely placing it before the parliamentary assistant so that he will understand my use of the word "secret".


George James McIlraith: I have not the press dispatch with me. I saw the press dispatches, but I do not know that I should comment on the reading of them into the record, and I do not know to what extent in the reply I should seek to deal with press dispatches. I think if I can deal with the facts of the situation instead of dealing with press dispatches it will probably be more effective.



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Gordon Graydon: I should like to direct a question to the Minister of National Health and Welfare. I should have given him notice of it, but it did not come to my attention until this morning. I notice by the press that a board is being set up in various places to deal with the question of proof of age in connection with old age assistance to those in the 65 to 69 class. I was wondering whether that board will also have any jurisdiction over those over 70 who are attempting to qualify for old age security, but who have difficulty in proving their age.
JMr. Drew.]


Hon. Paul Martin (Minister of National Health and Welfare):: The hon. member for Vancouver South (Mr. Laing) spoke to me yesterday about this very matter, and the hon. member for The Battlefords (Mr. Bater) told me earlier this morning that he proposed to ask a question not precisely the same but along the same line.


Gordon Graydon: I am in good company.


Paul Joseph James Martin: As my hon. friend says, he is in good company.


Gordon Graydon: Gosh!


Paul Joseph James Martin: The Minister of Justice (Mr. Garson) said "For a change", but I would not agree with him. I may say that the regulations which have been formulated pursuant to the Old Age Security Act, but which have not yet been tabled in this house, will provide for an ad hoc tribunal representing the pensioner, the government and a third party in the community, at no expense, simply to assist the department in doubtful cases. But lest my reply give the impression that there is undue difficulty, let me say again to my hon. friend that over 95 per cent of those who are entitled to apply have done so.



QUESTION AS TO RETROACTIVE PAYMENTS

[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: should like to direct a question to the Minister of National Health and Welfare. If an application for old age pension is sent, in on or before January 1, 1952, but the applicant has not been able to secure proof of age before the end of January or February, will the old age pension date back to January, 1952?


Paul Joseph James Martin: I always appreciate the nature of my hon. friend's questions. In view of its importance I would want to give some consideration before making a reply.



NEWFOUNDLAND


[Stage Direction]
On the orders of the day:
George Alexander Drew: Mr. Speaker, I find that on November 26 I directed to the Prime Minister a question, of which I had given notice at that time, in regard to the use of a Royal Canadian Air Force plane on November 22 to make a special flight from St. John's, Newfoundland, to Gander, under somewhat unusual circumstances. At that time the Prime

Combines Investigation Act Minister indicated that he would make fur- extending the thirty-day period. We have no ther inquiries into these circumstances. I information as yet as to whether such an wonder whether he has that information extension has been agreed on. now. If not he can take this as notice and
give us the information he has obtained.	COMBINES INVESTIGATION ACT


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I know that the
Acting Minister of National Defence had obtained information, and he showed it to me at that time. I know that he had a note about it in his folder to be used when the matter was again raised. I will endeavour to get that note and make use of it at the earliest possible moment.



INFORMATION ON CEASE-FIRE NEGOTIATIONS

[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Secretary of State for External Affairs):: Yesterday the leader of
the opposition (Mr. Drew) asked for information concerning developments in connection with the cease-fire negotiations in Korea. I think I can give that information now. It was agreed in Korea on November 27 that if the military armistice agreement was not signed within thirty days-and I am quoting from this agreement:
The subdelegations shall revise, immediately prior to the signing of the military armistice agreement, the above military demarcation line and the demilitarized zone in accordance with the changes which have occurred in the actual line of contact between both sides so that the revised military demarcation line will coincide exactly with the line of contact between both sides immediately prior to the signing of the military armistice agreement and will constitute the military demarcation line for the duration of the military armistice.
That is a quotation from the agreement made a month ago. At ten o'clock yesterday morning our time the thirty-day period from November 27 expired without any military armistice agreement having been signed. This means that after discussion which is now taking place-which is still taking place-on arrangements for supervision of the armistice and arrangements for the exchange of prisoners, and on the final item on the agenda, the two teams will determine a new demarcation line based on the line of contact as it stands just before the signing of any armistice. Since November 27, however, there have been no substantial alterations in the line of contact, and the line now, therefore, is almost the same as the cease-fire line which was agreed to on November 27.
An alternative method of procedure would be for the two sides to agree on an amendment. of the agreement of November 27,



AMENDMENT TO FORBID THE FIXING OF SPECIFIC OR MINIMUM RESALE PRICES

[Stage Direction]
The house resumed, from Thursday, December 27, consideration of the motion of Mr. Garson for the second reading of Bill No. 36, to amend the Combines Investigation Act.
Hon. Lionel Chevrier (Minister of Transport):: Mr. Speaker, I had not intended to take part in this debate, but because there have been so many speeches-many of them more or less to the point-from the official opposition side of the house, I felt I should give some reasons why, as a member of the government, I was of the opinion that this legislation should be supported. For that reason I should like to speak briefly on the subject of the legislation which the government has proposed to deal with resale price maintenance.
Any delay in the consideration of this legislation, as the Prime Minister has said, is not in the government's view in the interests of the public at large. Either we are serious about this matter or we are not. Nor do I think that the alternative measures which have been proposed are likely to produce the results that the people of Canada want. Let me give you some reasons for believing that we should reject the tactics, the delaying tactics, which have been submitted as alternative proposals to this house by those who have moved various amendments, and those who have supported those amendments with speeches.
After the prolonged consideration that has been given to the proposed legislation on resale price maintenance, there is perhaps little for me to say. When I hear, however, members from the opposition side of the house suggest that this matter is being rushed through without due consideration to a conclusion, I wonder what more could reasonably be asked from this side of the house.
Hon. members will recall first of all that the royal commission on prices under the chairmanship of Professor Clifford Curtis of Queen's university was-and I quote his remarks-"impressed by the degree to which individual manufacturers fix the sale prices of their products, and so narrow the area in which price competition amongst wholesalers and retailers is operative."
2442	HOUSE OF
Combines Investigation Act
That commission, which included a representative of the women of Canada, in the person of Mrs. Sutherland, and a prominent representative of the Quebec co-operative movement, Mr. Bois, recommended that the combines investigation commission give careful consideration and study to the problem, with a view to devising measures to deal with it.
Then, later on, we had the MacQuarrie committee, an impartial and distinguished group of Canadians who made a study of resale price maintenance and reached the unanimous recommendation that the practice is not in the public interest and should be made illegal. That was a unanimous recommendation, and there was no reservation to it whatever.
There has been criticism of that report on the ground that the committee did not obtain sufficient factual evidence. I am not much impressed by that kind of criticism. What I think is significant is that men like Mr. Justice MacQuarrie from Nova Scotia, and Mr. Curtis from British Columbia, Mr. Lamontagne from Quebec and Dr. Mackintosh from Queen's university, Kingston, Ontario, were satisfied that they had enough information to reach the unanimous conclusion that resale price maintenance is not in the public interest. I am quite sure that if they had felt that more information was required before reaching such a conclusion they would not have hesitated to say so.
Nevertheless a joint committee of parliament was established. That committee sat for days. It heard representations from leading organizations who did not agree with the findings of the MacQuarrie committee. Of course, the committee could have sat for a much longer period of time. After reading the evidence presented to the committee I am satisfied, and I think the great majority of members of the house are satisfied, that the MacQuarrie committee's conclusions were well founded and that there is every reason to take immediate action.
In addition to the study given to resale price maintenance by the royal commission on prices, by the MacQuarrie committee and the joint parliamentary committee, we have been discussing this matter in the house for many, many days.
But what is the position of the official opposition in the matter? The truth is that they have no policy. They would like to get credit from those who benefit from resale price maintenance for preventing the passage of the legislation. On the other hand, they attempt to justify their position to the consumers and the general public by asking for more consideration.


Yet the fact of the matter is that the official opposition have spent a good deal of the time during which they might have debated the merits of the legislation talking about not having enough time.
Yesterday the Prime Minister (Mr. St. Laurent) refuted the suggestion that the government is not wholeheartedly behind this legislation. I wish to associate myself most strongly with the words of the Prime Minister, as I am sure every member on this side of the house would want to do. It is my view that the legislation is in the public interest, in the interests of consumers; and because it is in the interests of consumers, it is also in the interest of manufacturers and the distributive trades as well.
An attempt has been made to create the impression that this legislation is detrimental to the business life of Canada. I see no reason to think that that will be the ease. The legislation should result in increased competition among distributors. At least it will remove one of the barriers to competition. Is that a good thing? I believe that it is. I do not believe any efficient business need fear competition. I know that many businessmen, large and small, share this view and admire the government's courage in introducing this legislation.
It would have been possible, of course, for the government to shut its eyes to the problems created by the growing practice of resale price maintenance. We could have let well enough alone. But, as I see it, it is the duty of the government to be vigilant where the public interest is concerned. Resale price maintenance may be relatively harmless in some cases; but in other cases, as the Curtis commission, the MacQuarrie committee and the joint parliamentary committee have pointed out, it is a grave and growing abuse.
It is a fact that business prospers when it is free to serve the public to the best of its ability, with as few restrictions as possible, whether imposed by governments or by private arrangements.
On the whole, we know that Canadian business is efficient, and I would like to see it become more efficient, more able to supply Canadian consumers with goods of the highest quality at the lowest possible prices. The evidence we have before us from these various commissions and committees, and the facts that have come to my personal attention, lead me to believe that the practice of resale price maintenance does not lead to consumers obtaining full advantage of competition. That is why I support this legislation.

In my judgment it is not going to lead to any revolutionary change in business practices or in prices. But what change there is will be in the right direction. When prices could or should be reduced, those reductions will come about more readily and more quickly. There will be more flexibility in the system.
We shall, I believe, be better able to meet competition from imported goods. As hon. members are probably aware, there is already a good deal of competition for the Canadian consumer's dollar from producers in other countries. It is logical to believe that there will be more competition if, as we hope, the world recovers from its present difficulties and the imminent threat of war is removed. For that reason alone I think we should support all measures that help to make Canadian business more efficient and better able to hold its own. We cannot afford to become flabby and to rely upon restrictive practices to support the inefficient.
Merchants who find themselves with stocks of goods which are moving too slowly will be able to reduce their prices in order to overcome consumer resistance, without endangering their future sources of supply. Consumers will be able to shop about, to get greater advantage from being able to pay cash, or from finding some merchant who, because of location or volume or for some other reason, is able to offer goods at a lower price.
As several members have pointed out, the effect on the cost of living will probably not be very substantial. It may be that the effect upon the cost of living index itself will be quite modest, partly because the index does not fully reflect reductions below regular prices, but that is not a reason for not going ahead with the legislation. There are many anti-inflationary measures which do not individually and by themselves affect the cost of living very much, but they are worth doing, nevertheless, as part of a general policy of restraining price rises and bringing about price reductions.
Already there have been four amendments to this legislation moved by members of the official opposition. There has been more time consumed with reference to this legislation than has been consumed in connection with a number of other matters which the house thought and which members of the official opposition thought should have taken more time than in fact they did. What I am trying to say is that practically every alternative has been canvassed with reference to this legislation and I feel that the time has arrived -I think the house is of the same opinion-
Combines Investigation Act when we should no longer delay its passage. Therefore I move, seconded by the Minister of National Health and Welfare (Mr. Martin):
That the question be now put.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, as I understand it, the motion which has just been moved by the Minister of Transport (Mr. Chevrier) is debatable.
It must have been interesting to the house-


Mr. Abbott:: Oh, oh.


Donald Methuen Fleming: If anybody should have less to say about talking again it is the Minister of Finance (Mr. Abbott) whose contributions to the deliberations of the house in recent days have consisted simply of wisecracks which are not very funny.


Douglas Charles Abbott: I never speak unless I have something to say.


Donald Methuen Fleming: It appears that the Minister of Finance has turned over a new leaf in the last minute.


Mr. Speaker:: I am sure that it will be easier for hon. members who speak to keep their remarks relevant to the bill if they are not interrupted. It is difficult for them to do so when there are so many interruptions.


Donald Methuen Fleming: Thank you, Mr. Speaker. It must be embarrassing at this particular stage when I think the house expected the Minister of Justice (Mr. Garson) to have his opportunity to conclude the debate by replying, to find another member of the government entering the debate and reading a prepared statement. I think it must have been pretty embarrassing to the Minister of Justice to sit there and, at the point where normally as mover of the motion that this bill be read a second time he would reply, to have to sit back and listen to one of his colleagues make a speech setting out the government line. The statement just read by the Minister of Transport simply followed the government line.
What purpose that statement was intended to serve apparently will be left to the house to guess, but the motion which has been put before the house at least exposes to naked view what has been attempted here by the government in various ways for some days past, that is, to throttle discussion on this bill and to prevent adequate consideration of the important subject involved in the measure.
The motion that the question be now put is designed to stop the discussion of the measure on second reading. This being the government's position, this being the determination of the government, I hope that hon. members who are now called to step into line and vote as the government demands wiJi
2444	HOUSE OF
Combines Investigation Act have in mind that they are in this way giving endorsement to government action to stop further discussion of one of the most important measures which have confronted the Canadian parliament.
The fact that this measure has already run the course of debate for some time, the fact that it has given rise to a good deal of discussion in the house and outside, the fact that it is a measure which demands and deserves the study of the house will create a lasting indictment of this attempt on the part of the government, or this further stage in the attempt that the government has made in recent days, to throttle discussion of the bill.
The Minister of Transport said something this morning about getting along with this measure, that there had been enough discussion already in the house. If we do not hear anything more from the government than we have heard thus far one question will remain unanswered to the end of time as far as this debate is concerned. That question is this: Why was it necessary that such haste be displayed in this whole undertaking, that the parliamentary committee should not have been permitted to conduct a proper, adequate and thorough investigation? Why was it so urgent that it should have been left to a Liberal majority in that parliamentary committee to deny a hearing to people whose businesses stand in jeopardy in the light of this measure? Why was it so urgent that people should be told, people who had serious interests at stake and serious views to lay before the parliamentary committee, that the committee had no time to hear them? Why was it that organizations representing thousands of retailers in this country were denied access to and hearing by that committee?
Those questions remain unanswered. The government says that it is necessary that the house proceed with haste. I want to say to the Minister of Transport, whose acquaintance with this subject may have been a little recent, that he has a great big question to answer, a question which remained unanswered in his speech this morning.
Here is a practice which has been established in many lines of retail merchandising. It is a practice that has existed in some lines of merchandise since early in the century, and in many other important lines for at least twenty-five years. That practice has existed for that length of time within the knowledge of this government which has been in office since 1935, and yet in all those years this government, with that practice existing right under its nose, did not make the slightest move to stop or interfere with


it. But suddenly in the fall of 1951, like a bolt from the blue, without the slightest warning, it becomes a matter of life-and-death urgency. Why?
Let the Minister of Transport tell us why this practice has gone on under the nose of this government since the government came into office in October, 1935, for more than sixteen years, without their moving a finger to interfere with it. Let him tell us why in the fall of 1951 it has become a matter of life-and-death urgency, a matter which will brook no delay, a matter which could not even wait until there had been an adequate study and understanding of the matter in a parliamentary committee appointed for the purpose and then throttled by government decision?
We have been told that the father of the Combines Investigation Act was the late Right Hon. W. L. Mackenzie King. Mr. McGregor was the commissioner under the Combines Investigation Act all the way through the late Mr. King's tenure of office as prime minister-yes, up until the fall of 1949 when he resigned rather than submit to further indignities at the hands of this government and to being a knowing party to a continued breach of the law of this country by the government.
Since this legislation is piotured to us as a matter of life-and-death urgency, I tell the government and every Liberal member in this house who is being whipped into line to vote for second reading of this measure today that by their action they are condemning the govemiment of the late Mr. Mackenzie King. They are condemning what Mr. McGregor has done or failed to do during his long period of service as commissioner under the Combines Investigation Act. That is precisely what they are doing today. The government is proposing a vote of condemnation and censure upon the inaction of the late Mr. Mackenzie King and upon Mr. McGregor's stewardship in office over these long years because nothing was done then, and now whereas we of the official opposition say that this measure should have adequate study, the government's headlong rush now constitutes a blanket condemnation of all that has gone before it. I hope government supporters will weigh that fact well. I hope they will not overlook the fact that today, if they fall into line at the cracking of the government whip, they are giving a vote of condemnation on the government for what it has left undone in the past.
I will tell you why the government was so desperately anxious to make a show of doing something this fall. It was because the cost of living has soared out of sight, and

when the government was not prepared to abandon its outrageous taxation policies, which have been responsible for boosting the cost of living out of sight, it was politically essential that they should drum up some kind of hoax to delude the people of Canada into thinking that something was really being done-and a hoax this measure is. That is the only name it deserves. It was conceived as an attempt to delude the people of Canada, but the cat has been let out of the bag. The Minister of Transport (Mr. Chevrier) has added his contribution this morning to the confession which has already escaped the lips of one or two members of the government, and has indicated that this measure if adopted is not going to have any perceptible effect on the cost of living. That is an undeniable fact, and in itself is an exposure of this hoax that the government is attempting to perpetrate.
The second feature of the hoax is this, and of course it is an example of the technique of one Adolf Hitler, the well known technique that when you are taking a line of action that is designed to play into the hands of one particular group then you get up and deny it. You deny that it is going to have that effeot, denounce those who are of that group who are going to be affected, and say that your measure is going to help somebody else. That is what we see taking place in this debate on the part of the orators opposite. Here is a measure which has been shown beyond any doubt whatever to be one that is sought by the big interests in the merchandising field. The biggest of the departmental stores are asking for it. The chains are going to benefit by it. It is the big interests in the merchandising field who are seeking this measure, and it is the little fellows in the merchandising field whose interests are at stake, the life of whose businesses in thousands of cases is in jeopardy and who are pleading for an opportunity to be heard and for fair consideration of their position.
Their position is a very important one. The small retailer in Canada represents as fine a flowering of the system of free enterprise in this country as you will find. Yet the government is placing that small retailer in jeopardy by their insistence on jamming this measure through. This hoax again is exposed as a callous attempt on the part of the government, in league with big interests, to hurt the interests of the little retailer. That is the second feature of this monstrous government hoax. We have not heard from the Minister of Transport this morning one word of concern about the fate of the little retailers. There has not been a suggestion of concern for their plight in face of the threat of the
Combines Investigation Act loss leader practice. The minister cannot deny that branded goods, the kind that are subject to the practice of resale price maintenance in Canada today, are the goods that are by their very nature the kind that the big merchandisers like to seize upon for the purpose of loss leaders. After all, sir, what is the use of the retailer selecting for his loss leader some article that is not branded, that is not the subject of national advertising, -that has not a known price? The public could not then estimate the alleged reduction in price, but goods that are subject to resale price maintenance are those that naturally lend themselves to use as loss leaders by the big merchandising outlets. That, sir, is what is going to happen, and it does not matter to the government that those who know their own business best are pleading for consideration in face of the threat of the harm that will be done to their businesses by the loss leader practice.
The government has not the time to listen to them. The government is too busy pursuing through this measure its political purposes, its base partisan purposes, even to listen to those who are pleading for the existence of their businesses. Not a word fell from the lips of the minister this morning on the subject of loss leaders. Yesterday we heard the hon. member for Spadina (Mr. Croll) call for an election on this issue. I would remind the house that in the committee the hon. member for Spadina at least was concerned about the loss leader practice. He was at least concerned enough over the threat that the loss leader offers to the business of the small retailer that he-and I give him credit for it -drafted legislation to illegalize the loss leader practice. When the committee considered that draft legislation it apparently arrived at the conclusion-and I think this is a fair summary of the views expressed by those who spoke in the committee on the bill-that it was not workable, that it would be very difficult to enforce, and that it was too rigid. But I do give the hon. member credit for at least recognizing that the loss leader practice is a grave and imminent threat to the small retailer. As far as the government is concerned, however, there is not the slightest inkling on their part of the merest concern over the damage that is going to be done to the small retailer by the vicious and altogether reprehensible practice of loss leaders in merchandising in this country. Therefore we are left with the conclusion that the government is prepared to leave the small retailer to the mercy of the big merchandising outlets applying the loss leader practice.

Combines Investigation Act
That possibility, I am sorry to say, did not greatly concern Mr. McGregor because he took an attitude that can be summed up in the phrase that the minister used this morning when he was talking about those whose businesses are placed in jeopardy by this measure. He spoke of them as inefficient retailers. The government apparently considers, as apparently Mr. McGregor thought, that the so-called inefficient retailer is the only man whose interests are placed in jeopardy by this measure. If that is the view of the Minister of Transport, then he had better go back and read the evidence presented to the committee. He had better have some regard for the views put before the committee by responsible leaders of organizations of retailers in various classes of merchandise. They are not inefficient retailers. They are people who will be put in jeopardy by ruthless practices on the part of big retail outlets unless they are permitted to continue to use this mechanism which has grown up as the small merchant's protection. This practice of resale price maintenance has grown up as the protection for the small retailer, and I altogether deny that the retail associations in this country who have raised their hands in a plea for hearing, who have raised their hands in a plea for consideration of the position of jeopardy in which this measure will place them, represent inefficient retailers. Apparently the view of the government is that it is better if a few of these retailers go to the wall. There is not the slightest concern about them. Mr. McGregor's attitude was, let the weak die. It is a fine doctrine to preach, something in the nature of tooth and claw competition.


Mr. Garson:: Will the hon. member quote from Mr. McGregor's evidence any selection which will support the statement he has just imputed to him?


Donald Methuen Fleming: I shall be glad to quote the whole of Mr. McGregor's evidence, because every last word of his evidence showed not the slightest concern about the plight of the retailer. His attitude was, let the weak die; they add no strength to our economic system.


Mr. Sinnott:: There was no mention of anybody dying. Answer the question.


Donald Methuen Fleming: The whole of his evidence is my quotation from Mr. McGregor. I suppose that within recent days all members have been refreshing their memories of Dickens' "Christmas Carol". You will recall the expression used by Scrooge when a plea was made to him on behalf of the weak and the hungry. His attitude was, let them die; there would be so much less overpopulation.


The view of the government, and it is revealed crystal clear in the very callous way in which the Minister of Transport (Mr. Chevrier) treated this subject this morning, is that there is overpopulation in the retail field, so let the weak die. The government attitude has been revealed in this debate-


An hon. Member:: Even my four-year-old daughter understands that.


Donald Methuen Fleming: If my hon. friend's four-year-old daughter can understand the analogy I believe that, given time, he may yet understand it too.
On the part of the government there has not been the slightest inkling of a willingness to give any consideration to the laws which have grown up in the United States to deal with this situation. Is it a mere coincidence that forty-five out of the forty-eight states of the United States have rejected the kind of legislation that this government is seeking to thrust down the throat of parliament? I ask this house to stop and ponder. Can forty-five out of forty-eight states all be wrong? They have been through this because resale price maintenance was banned in the United States many years ago. They tried this experiment that this government is outrageously trying to thrust upon this country without adequate consideration, and in the light of their experience with the situation then arising forty-five out of forty-eight states of the union passed legislation which legalizes this system of resale price maintenance.
It may be the great misfortune of the people of the United States that they have not someone like the Canadian Minister of Justice (Mr. Garson) to tell them what they should do about what he no doubt regards as their mishandling of this situation. It may be the great misfortune of the people of the United States that the ability of the member for Coast-Capilano (Mr. Sinclair) to railroad things through a committee and apply the guillotine to the committee's deliberations is not available to the United States, so that the people could profit from the joint wisdom of these two hon. members. The United States is doing the best it can without the superhuman assistance of the Canadian Minister of Justice and the member for Coast-Capilano, and it has somehow got to the point where forty-five out of the forty-eight states, having had enough of this kind of experiment, have enacted fair trade laws which have the effect of making resale price maintenance a standard practice.
This government can crack the whip until the sounds reverberate in every corner of the Liberal lobbies, in every office occupied by a Liberal member, but they will not change the-

fact that the country in which retail merchandising practices and conditions are closer to the conditions obtaining in this country than in any other, even though deprived of the leadership of the Minister of Justice and the member for Coast-Capilano and having experimented with the kind of legislation the government is trying now to thrust through this house, has rejected it in the light of their own experience.


Mr. Coldwell:: May I ask the hon. gentleman a question? Can he explain to the house what the legislation is in certain states regarding fair trade?


Donald Methuen Fleming: Yes, if my hon. friend does not know.


Major James William Coldwell: I happen to know, but I do not think the hon. member does.


Paul Joseph James Martin: No, I do not think he does.


Donald Methuen Fleming: Oh, I see health and welfare is coming alive at last. It would indeed have been strange, Mr. Speaker, if the Minister of National Health and Welfare (Mr. Martin) had been able to go through this debate without injecting himself into it. I am glad to see some evidence of returning life in the minister, because he comes from the city of Windsor-


Paul Joseph James Martin: And there is no better city. Thank you for giving me that chance.


Donald Methuen Fleming: -which is just across the river from Detroit where a good many of his constituents do their shopping. The state of Michigan, as one of the forty-five states, has enacted fair trade laws.


Paul Joseph James Martin: On a question of privilege, Mr. Speaker, the citizens of my community do most of their shopping in Canada.


Donald Methuen Fleming: Before the minister puts his long neck out too far on this subject, it would be highly desirable if he were to have some private treaty on this matter with the member for Charlotte (Mr. Stuart). I recall to the governmental embodiment of health and welfare that when the member for Charlotte was dealing with some degree of particularity with the kind of operation-


Some hon. Members:: Order.


Mr. Speaker:: I believe the hon. member is referring to another debate on another subject.


Donald Methuen Fleming: Mr. Speaker, I was not quoting from Hansard on the subject. It is only because of my concern for the Minister of National Health and Welfare, and for his political future, that I do not want to see him go too far on this subject and get at cross purposes with the hon. member for
Combines Investigation Act Charlotte who had spoken on the same subject as that on which the Minister of National Health and Welfare has just now indulged himself. But if the Minister of National Health and Welfare is not as well acquainted as are most people with the buying practices along the Windsor-Detroit border, perhaps it may not be unfair to inform him that across the river in the state of Michigan, where a good deal of shopping is done by Canadians as well as by Americans, the practice of resale price maintenance has full legal effect under the fair trade laws of that enlightened state.
For the enlightenment of my friend the hon. member for Rosetown-Biggar (Mr. Cold-well), I should like to tell him that in general, under the fair trade laws enacted by forty-five out of the forty-eight states, the practice is for the manufacturer to set a price and register it with the board established for that purpose by the state in question; and that price, having been approved, becomes the lawful price and can be enforced by the manufacturer and supplier as the price at which every retailer and every outlet sells his product.


Stuart Sinclair Garson: Will the hon. member permit a question?


Donald Methuen Fleming: I am delighted to do so.


Stuart Sinclair Garson: From his apparently extensive knowledge of the fair trade laws in Canada, where does he get this curious idea-


An hon. Member:: In Canada?


Stuart Sinclair Garson: In the United States, I should say. Where does he get this curious idea that there is a board in the state of Michigan which approves the price under resale price maintenance? I can assure him that there is no such thing.


Donald Methuen Fleming: The Minister of Justice can save his breath. He can devote his breath to learning something about that subject, because it is high time he did so. I did not say there is a board in the state of Michigan. In reply to the hon. member for Rosetown-Biggar, who asked about the effect of fair trade laws, I said that in general the practice has been to have the price registered publicly by a manufacturer.


Stuart Sinclair Garson: On a question of privilege-


Donald Methuen Fleming: There is no question of privilege involved in this, Mr. Speaker, and I decline to be pushed aside by the Minister of Justice.


Stuart Sinclair Garson: As soon as my hon. friend has taken his seat, I will expose his ignorance on the subject.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.
2448	HOUSE OF
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Donald Methuen Fleming: The Minister of Justice will be quite busy enough, I think, Mr. Speaker, between now and the time this debate closes -I think he is going to be extremely busy trying to cover up his lamentable exposure of ignorance on this subject. For two hours and forty minutes last week we listened to a marathon exposure of his lamentable ignorance on a subject upon which he, as a responsible minister introducing a bill, should have been well informed before he started. That is another fine sample of the way in which the government is preventing others from getting information on this subject when they have earnestly sought it with a view to arriving at intelligent decisions.


Major James William Coldwell: Will the hon. member permit one question which is really for the purpose of getting information?


Donald Methuen Fleming: Yes.


Major James William Coldwell: How is the price arrived at which the manufacturer sets for the retailers?


An hon. Member:: Where?


Major James William Coldwell: How is the price arrived at in the United States, under the fair trade practices?


Donald Methuen Fleming: I expect that in every case the manufacturer will have due regard for the cost of the article, for what is a fair profit, for the ability of the people to pay and for what they are willing to pay for his product.


Major James William Coldwell: Is it not a fact that the manufacturer sets the price and that, if he can get one retailer to agree to it, that price is applicable to all retail business in that state?


Donald Methuen Fleming: Mr. Speaker, I could not imagine any greater act of folly on the part of any manufacturer than to set the price of his article or product at an amount which the public will not pay. What we have been told in the evidence before the committee, so far as we were allowed to get any evidence, was that the manufacturer is not foolish enough to set the price of his article at a figure that the public will not pay. He is not going to price himself out of his market. That is the protection of the public.
In this measure the government is not protecting the interests of the consumer. On the contrary, the government is exposing the consumer of this country to the grave danger of being made the fair game of the big merchandising outlets and big merchandising interests which will, with the extinction of more and more of the small retailers, acquire a greater and greater degree of monopoly control of merchandising in Canada. That


is the danger that has confronted the government in this matter; and that is the danger that the government chooses to ignore in favour of pursuing partisan purposes with regard to this measure. It is not simply a matter of trying to keep small retailers alive for the sake of the small retailers alone, Mr. Speaker. The consumer of this country has no greater assurance of fair play and proper trade practices than in the existence of a healthy retail trade flourishing through a multiplicity of small retail outlets. If you jeopardize the existence of those small retail outlets, you are placing in pawn not simply the life of the business of the small retailer but as well the fundamental interests of the consumer in this country. Many hon. members of this house who are being called upon today to be whipped into line and to do the government's bidding in this debate and in the vote to follow know that; and many of them have told us so privately around these corridors in recent days. The question is not being asked by members of the official opposition alone: Why this unseemly haste? That question has been asked, I may tell you, Mr. Speaker, by many Liberal members in this house.


John Sylvester Aloysius Sinnott: Name them.


Donald Methuen Fleming: I am not going to embarrass them.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: It would be a serious embarrassment to many of them. I am not going to embarrass them. They are going to be embarrassed enough when this vote comes. But that is the fact. That question, why this undue haste, this unseemly haste, this indecent haste, remains unanswered. It remains unanswered because the government is prepared to sacrifice the interests of the small retail outlets in this country, and is prepared to sacrifice the long-term and fundamental interests of the consumers of this country in favour of jamming through this house a half-baked, ill-considered, unjust measure to further its own partisan interests.


Major James William Coldwell: Mr. Speaker, we have heard a great deal about the fair trade practice in the United States, but I think that no one has yet explained it except the Minister of Justice (Mr. Garson) who did so to some extent last night. The reason that we did not support the amendment of my hon. friends was that we had been going into the matter of this practice in the United States. As was stated last night by the Minister of Justice, the fact of the matter is that the first so-called fair trade act was placed on the statute books in the United

States by the state of California. That act was found to be unsatisfactory to the manufacturers and two years later, in 1933, there was added to that legislation a clause which made the resale price agreed upon by a manufacturer and a single retailer binding upon all retailers upon notice. That was the crux of the legislation which was copied in forty-five of the forty-eight states during the period of the depression when things were difficult indeed for retailers everywhere. As the minister said last night, the latest Californian legislation was so hastily copied that even typographical errors and errors in punctuation in the Californian legislation were copied in the acts put on the statute books in various states. In a recent case in Florida, when this matter was under challenge, the court pointed out that the power to fix prices under fair trade acts is vested in private persons; that no right to review the fairness of the price is provided for; and that no test or yardstick of fairness is defined. It has also been pointed out that the first fair trade acts were upheld in the courts in an atmosphere of crisis and emergency which no longer exists. The inference of course is that today different conclusions may be reached.


John George Diefenbaker: What is the hon. gentleman reading from?


Major James William Coldwell: I understand that today the legislation is practically defunct in some forty-two of the forty-five states that enacted the legislation.


Donald Methuen Fleming: No evidence to that effect.


Major James William Coldwell: The hon. member says that there is no evidence to that effect; but the hon. gentleman gave no understanding to the house that he knew anything about the fair trade legislation and practices in the United States.


Donald Methuen Fleming: Will the hon. member permit a question? Will he indicate what he has just been reading from?


Major James William Coldwell: Yes; I referred to an analysis made in two articles in the New York Nation.


Donald Methuen Fleming: By whom?


Major James William Coldwell: On the dates of June 2 and May 19; two articles in a paper which has the reputation of-


Donald Methuen Fleming: Of being socialist.


Major James William Coldwell: -authoritative analysis of all kinds of problems Whether one agrees with the New York Nation editorially or not, the articles that are published in that paper are, as a rule, very carefully prepared and authentic.
Combines Investigation Act


Donald Methuen Fleming: Socialistic propaganda.


Mr. Noseworihy:: What is wrong with that?


Major James William Coldwell: As a matter of fact, whenever something is disliked it is said to be socialistic propaganda, and yet I venture to say that a great deal of the legislation proposed by Mr. Bennett in 1935 was more socialistic than the bill which is now under discussion in this house. Incidentally, I have always given Mr. Bennett credit for the last-minute conversion to intelligent ideas that he expressed just before he was defeated in 1935.


Mr. Macdonnell (Greenwood):: This is the first time your lot have ever given him credit for anything.


Major James William Coldwell: I want to put my suggestion once more before the house. If we are going to protect the consumers, the manufacturers and the retailers there should be a board which can hold public hearings, and to which an aggrieved person, whether retailer, consumer or manufacturer may apply to get a fair deal. That is what I believe should be done. However, it has been shown conclusively, I think, in the evidence before the committee which sat, 800 pages or more of the evidence, that the particular form of manufacturers' control of prices which now exists is against the public interest. For that reason, although our amendment was defeated, we shall support the bill when it comes to a vote in the house.


Mr. E. D. Fulton (Kamloops):: Mr. Speaker, now that the government has seen fit to apply the closure-


John Sylvester Aloysius Sinnott: Tell the truth.


Edmund Davie Fulton: -although the Prime Minister-


Mr. Richard (Gloucester):: Go on; take all the time you need.


Edmund Davie Fulton: Now that the government has seen fit to apply the closure although the Prime Minister said yesterday that they had decided not to, we can see just to what extent the government really desires to prevent the evidence in this matter from coming before the people. The hon. member for Rosetown-Biggar (Mr. Coldwell) has just said that in the 800 odd pages of evidence which embodied the committee's proceedings it became abundantly clear that resale price maintenance harmed the consumer. I regret that the hon. member for Rosetown-Biggar has not closely read the evidence, because the whole objection to the committee's proceedings is that there is at no point any evidence from which the conclusion can be drawn that the practice of resale price maintenance harms the consumer. Actually, when we asked that we be allowed the opportunity to obtain such

Combines Investigation Act
evidence, if evidence existed, the guillotine was applied and the committee chairman choked off all attempts to call witnesses who might be able to give us that evidence. He also choked off all attempts to obtain evidence as to the comparative profit margins for price-maintained and non-maintained goods, and as to comparative prices to the consumer of price maintained goods and non-maintained goods. Therefore the position is that we have no evidence. We have no evidence that the practice of resale price maintenance is harmful to the consumer. I should like at any time to be furnished by the hon. member for Rosetown-Biggar, or by any other hon. member, with evidence to that effect, because-


Major James William Coldwell: What about the MacQuarrie report and Mr. McGregor's evidence?


Edmund Davie Fulton: They were not evidence, only statements of opinion. One would have thought that, if there were such evidence, the government would have been willing and anxious to bring it forward. The only conclusion to which one can come from their failure to do so, and from their obvious and successful desire to choke off discussion and to prevent us from getting such evidence, is that actually the evidence, if it were produced, would tend the other way.
There is, however, ample evidence to the effect that the small retailer will be hurt if the practice of resale price maintenance is eliminated. In the light of that evidence, we are left with the question, why is the government in such a hurry to hurt the small retailer? Why are they in such a hurry to remove the only protection which the small retailer has against the power of the big interests, the monopolies and the large chain stores, and leave him at the mercy of cutthroat competition? No satisfactory answer to that question has yet been given; yet the Prime Minister, in taking part in this debate yesterday, said that the government was not willing to leave this matter over for any further or fuller investigation; that they were going to remove the protection from the small retailer and leave him to stand on his own feet. It is a callous, ill-considered and ill-advised course to follow, with much harm to be done to independent Canadian business.
In dealing with this matter I believe it is important to remember that the evidence we have does not support, but indeed directly contradicts, the propaganda efforts which the government have been making to convince the Canadian people that it is the big interests that want this practice of resale price maintenance, and particularly the propaganda put forward by the government to the effect that it is the manufacturer who wants resale price maintenance. Nothing can be further from the


truth; nothing can be more directly in conflict with the evidence which we have. The evidence which we had in the committee on this point showed most clearly that it is not at the instance of the manufacturer that resale price maintenance prevails, but that the practice was worked out and applied by and at the request of the small retailers who found it essential as a measure to protect them from the unfair types of competition being indulged in by the big interests. Once again I refer particularly to the evidence of Mr. Fred McGregor, who answered that question perhaps more clearly and with less hesitation than he answered any other questions in his whole evidence-and his answers to questions were on the whole not given in a hesitant manner; but of all the questions which were asked he was perhaps most definite in his reply to the questions as to who wants this most, who benefits most from it, the manufacturer or the retailer? His answer was, "unquestionably the retailer".
It is also important to bear in mind that *there is nothing before this house, as there was nothing before the committee, on which we would be justified in basing the conclusion that the removal of resale price maintenance will benefit the consumer with respect to prices. Indeed, there is much before us to justify the conclusion that it will harm the consumer in the long run both generally and with respect to prices, and if for no other reason than that it will result in the further concentration of power and control over the distributive trades in the hands of a few huge concerns, a tendency from which we already suffer in Canada to a degree greater than in any comparable country. There can be no question but that the result of that process, in the long run, will be to damage the interests of the consumer. That has always been the outcome when giant monopolies and powerful concerns gain almost exclusive control of any field of enterprise so vital to the welfare of the people.
That is the outcome to which the government is deliberately exposing the consumers of Canada, if it pushes through this bill without offering any alternative protection to the retailer. But it is not only from the harmful effects of the increased power given to the giant concerns that the consumer will suffer. There is also an absolute lack of evidence that the consumer will benefit one iota from reduced prices as a result of the passage of the bill.
In that connection one can rely upon the evidence of Mr. McGregor who stated that in his opinion price maintenance was objectionable only because it is, as he described it, an undue restriction of competition-and not at all because of any effect it may have on

prices. In other words his opposition to the practice was based entirely upon his theory as to the forms of competition which should prevail in this country.
He was a knowledgeable witness; but if the evidence that Mr. McGregor's opposition to it was based entirely upon theory and not at all upon practical effects is not sufficient, then one need only refer to the evidence of the Prime Minister's position, as he stated it in the house yesterday, as found at page 2385 of Hansard:
I still do not think it will have very much effect on the cost of living index.
And so we find that the legislation is being rushed through on the basis of theory, on the theory of Mr. Fred McGregor and of the MacQuarrie committee, that the practice of resale price maintenance is an undue restriction of competition. For the purpose of serving these theoretical ideas, ideas that apparently are held by the government, the protection enjoyed by the retailer is to be removed, and the weak are to be allowed to die. For that is exactly the whole purport of Mr. McGregor's theory.
He said, "If there are retailers who will suffer as a result of the elimination of the practice of resale price maintenance-well, that is too bad. They probably were not efficient, anyway. And if they were not very efficient, then the community can get along without them, so let them be eliminated. Let them be extinguished. Let them die. The country can do without them." That is a most callous and a most unjustified attitude to take toward such a large and such a vital group in our country, one which has made so great a contribution to the strength of our economy.
It is difficult to avoid using strong words and harsh language when describing that outlook on the part of a theorist; but it is much more difficult to avoid using strong language to describe the situation which we now find, when that same point of view is expressed, not on the part of a theorist but on the part of this government, responsible as it is for the administration of affairs in this nation.
But that callous indifference to the fate of the small retailer is exactly the attitude reflected by the Minister of Justice (Mr. Garson); that is exactly the attitude reflected in this bill- that without any thought of consequence to the retailer, and without any recognition that the retailer has any interests to be preserved, this legislation, which is designed only to fulfil somebody's idea of a theory of free competition, should be rushed through, even if it eliminates the small retailer.
Combines Investigation Act
They think the situation can be satisfied by the repetition of an ominous phrase- "Let the weak die; they probably were not rendering any service to the community, anyway."
The evidence establishes that the small retailer needs the protection of resale price maintenance. At the present time it is his only protection against the powerful big interests. And let there be no mistake about it: the big interests are just as powerful and big in this day, just as crushing today, as they have been at any time in the history of this country. And the only protection retailers have built up for themselves, without any help from the government, is this method of doing business.
It is all nonsense to say that they wish it to be kept in private hands. If the government would study this matter, as we have urged it to do, and came forward with some alternative method by which the small retailer could be protected, he would be perfectly willing and indeed happy to give up his own system of protection, one which he has worked out and put into effect by himself.
But the government has not done that. They have refused to allow time for study and consideration which would be necessary to work out some alternative method. In the absence of that study, in the absence of that alternative protection, it can only be said that this legislation is being rushed through in an attitude of callous indifference to the welfare and the needs of the small retailer, and of the consuming public who will eventually, and before too long, as a result of this measure, be at the mercy of big, powerful monopolies, the chain and departmental stores.
The proof of what I am saying is found in the statement of the Prime Minister yesterday when, as set out at page 2385, he was attempting to justify the government's willingness to rush the small retailers of Canada into oblivion, and leave with a few big giants of industry the control of the distribution of goods in this country. He said:
I made the statement the other day, and I repeat it, that if as a result of this legislation or as a result of any other condition there develops a contrary abuse, the government will consider what recommendation it should make to parliament to deal with that contrary abuse.
He was referring to the possibility of the loss-leader practice. Well, I would ask the Prime Minister or, since he is not in his seat, the Minister of Justice, just how long he thinks it will take to consider and work out that recommendation? And at what stage

Combines Investigation Act will the government decide that it has become necessary to work out some alternative form of protection? How many retailers will have to go to the wall? How many bankruptcies will have to take place in Canada? How many small concerns will have to be taken over by the giants of the distributive trades before the government decides the time has come at which they must give consideration to some alternative form of protection for the small retailer? Will it be one, or twenty-one, or a hundred or five hundred? How many thousands of dollars will have to be lost by small retailers before the government decides it is time to act?


Stuart Sinclair Garson: I might tell my hon. friend that I dealt with that yesterday, when he was not here. I would be glad to tell him privately.


Edmund Davie Fulton: The minister says he dealt with that yesterday. I shall not attempt to answer him in kind; I shall simply say that I read his speech, and I say he made no adequate answer whatever to the question.


George Alexander Drew: He did not answer.


Edmund Davie Fulton: I find no passage in the minister's speech in which he attempted to deal with that particular question. And if the retailers are to be left with that answer, then they must realize that there is an absolute certainty that they will find no protection whatsoever, and that the government does not intend to act to protect them against big business. Because there is no indication in the minister's speech that he has even remotely considered the problem, and that he has in any way shown that he is prepared really to come to grips with the situation that will confront the retailers.
What then is the retailer promised? What is the consumer promised as a protection against finding the retail and distributive trades of Canada in the hands of a few giant concerns? What is promised? What is the outlook which concerns, not only the distributive trades of Canada, not only the small independent businesses but also the consumer as regards protection against the abuses of loss-leader practices and other forms of unfair competition? It is the same sort of protection which the patient is promised-that he shall have an autopsy if his illness should prove fatal under the doctor's care. The retail merchants and small independent businessmen of Canada can get what comfort they can from the knowledge that after they have been driven to the wall, after they have gone bankrupt, after they have been killed off as a result of this concentration of economic power in the 

hands of a few giant concerns they will be given a post mortem to find out exactly what it was from which they have died.
Once more, when we have come to the point at which it would have been thought the government would come forward with some concrete evidence as to the real effects of price maintenance, when one would have expected that they would give some real reason and justification for their decision to push this bill through, what do we find? We find that instead of following that logical course the government is resorting to this closure embodied in the motion of the Minister of Transport (Mr. Chevrier) presented to the house this morning.
When confronted with the efforts to force from the government some statement of facts, some concrete evidence which would justify their proposed course, they resort to closure. We are left only with the conclusion -to which this whole debate, the government's whole attitude forces us-namely, that the government itself realizes that it has proposed a course which plays into the hands of the big business concerns of this country and which is against the interests of the small retailer and the consumer. Among other efforts to prevent the consuming public of Canada realizing these facts, to prevent these facts from being brought out in debate, they are resorting now to closure so as to throttle discussion.
Never let it be forgotten that there is only one group, in so far as those who are affected by this legislation are concerned, who want it, and that is the biggest interests in the retail field in Canada. It is wanted by the biggest chain department store. Without exception the small retailer, the independent man who has struggled over the years to set up his enterprise and is struggling to keep it going, is opposed to this legislation.
When we ask the government to let us have some facts, instead of being content with theories, theories which doom the small man to extinction, when we ask for some facts upon which they can justify their claim that this legislation will benefit the consumer, we are met with closure. We are met with closure for one reason and one reason only. The government has no facts upon which to support its claim that the consumer will benefit. The government knows that if this discussion is allowed to continue and an effort is made to get at the merits of the legislation it will become quite apparent to all Canadians that far from the consumer benefiting, the consumer will suffer in the long run and that the only group, the only interests, which will benefit will be the government's friends in big business. Therefore

they are now seeking to end this discussion and prevent that fact from becoming apparent by moving closure in the motion of the Minister of Transport.
I regret that the government should see fit to resort to these measures, but I think it becomes apparent to you, Mr. Speaker, in your position of impartiality, as it will become obvious to the public of Canada, that this government has lost all sight of its responsibility to the public of Canada, of its responsibility to preserve the independence of Canadian business, and is following tactics which are directly in line with the interests of monopolies and big business in Canada,


Joseph William Noseworthy: Mr. Speaker, in spite of all that has been said in this house and the language that has been used on both sides of the chamber, I suggest that every group, in so far as this bill is concerned, has one thought in mind-how best to curb the growth of monopolies in this country. I think that that is the concern of the government as well as of the opposition groups. We differ in the method to be employed to restrict the growth of these monopolies.
My concern is whether in supporting this legislation we are not inadvertently contributing to the growth of that which we all want to destroy, the monopolies. I think that that is the concern of the opposition groups. I am sure that it is the concern of many Liberals in the house whether this legislation will in and of itself contribute to the growth of one form of monopoly in this country while it seeks to curb the power of another.
The Prime Minister (Mr. St. Laurent) has expressed that concern and has assured us that once this legislation is in effect, if it is discovered that the monopolies in the retail and distributing branches of business are undertaking price wars and are operating to the disadvantage of the small dealers, amendments will be introduced or new legislation brought forward to deal with that. The Minister of Justice (Mr. Garson) has assured us and the hon. member for Spadina (Mr. Croll) yesterday held out serious threats as to what would happen to big business in the distributing field if they undertook any such practices.
I suggest that that is just not enough. I think that this house is entitled to know from the government much more than we have yet learned as to just what the government proposes to do or how they propose to meet that difficulty should it arise. I think there is a real danger and I think the government realizes there is a real danger. They 55-1951-2
Combines Investigation Act have no legislation to cope with it. I suggest that that legislation could be provided without unduly holding up this bill.
I am quite confident that the government is capable, if it wants to do so, of bringing in an amendment to this legislation or proposing alternative legislation which would meet the difficulty which they themselves have in mind without waiting until the damage had been done. It would seem to me to be much more businesslike to meet that problem now than to wait until the damage has been done and then bring before the house legislation to remedy something which in many cases will be beyond remedy.
Alternatives have been suggested and have been turned down by the house. Our alternative was cried down by the Conservative party as being socialistic. I want to put on the record the recommendation made to the committee in the brief of the Drug Trading Company. In the introduction to their brief they say that the company is operated by 1,535 retail druggists throughout Canada. They operate a voluntary chain of 450 independently owned retail drug stores. Quite obviously they are not a socialistic organization. Their recommendation as an alternative to this legislation is as follows:
In lieu of this, we urge that the Combines Investigation Act be revised so that, operating under such act, a board be set up with wide powers to investigate complaints that instances of resale price maintenance are an offence against the public interest; such a board to include representatives of the consuming public, the manufacturing, wholesale and retail trades and the government; and where it becomes evident to such a board that an instance of resale price maintenance is contrary to the public interest, the board shall have the power to invoke penalties against the offending parties and to require that such price maintenance arrangements be modified so as to eliminate the offence.
They spell out in their brief the composition of the board which they have in mind and the powers of the board. I want to say that our suggestion, which was in line with theirs, asked for nothing more socialistic than their recommendation, a board representing the consuming public as well as manufacturers, retailers and the government, with power to see that where price maintenance is in the interests of the Canadian public it should be operated under a board that is subject to public control. It should be a board set up by the government with a government representative sitting side by side with manufacturers', retailers' and consumers' representatives. The leader of the opposition (Mr. Drew) referred to such a board as we suggested as a board of bureaucrats. The leader of the opposition is very fond of the term "bureaucrats".
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George Alexander Drew: Mr. Speaker, I must ask the hon. member to refer to the place in Hansard where that is reported, and I ask him to do so before he repeats that statement.


Joseph William Noseworthy: If it was not in those words, when he questioned us as to the type of board and the power that we would confer upon it, his statement was that he did not want a board of bureaucrats telling businessmen what to do. He wanted a board made up of men who knew their business.


George Alexander Drew: I do not want to interrupt, but since the hon. member has Hansard I suggest that if he is going to say what I said he follow the very simple device of reading what I said from Hansard.


Joseph William Noseworthy: My point is that the type of board which we were suggesting was not intended to be any more bureaucratic than the board recommended by the Drug Trading Company, and which the opposition did not see fit to support. There are one or two questions I should like to put on Hansard which I think the Minister of Justice (Mr. Garson) should answer when we get to the committee stage on the bill. I should like him to tell us how this legislation will affect those manufacturers who maintain their own retail outlets. Are they to be left free to fix the prices of their goods sold through their own retail outlets while all other manufacturers will find themselves committing an offence if they do so? What will be the effect upon those manufacturers who maintain exclusive agencies throughout the country? Is a manufacturer who has an exclusive agency in a town to be permitted under this legislation to fix the price of his article? Is he to be in the same position as any other manufacturer?
The public have been asking what effect this legislation will have upon the automobile manufacturers, Ford and General Motors follow the practice of fixing the retail price of their products. Are they to be permitted to continue to do so, or will every dealer be entirely free to sell a new car at whatever price he chooses to sell it? I should like the same answer as far as the gas and oil companies are concerned. By some device, apparently without infringing the terms of the Combines Investigation Act, the gas companies manage to have a fairly uniform price for the same grade of gas everywhere. Where will they stand under this new legislation? Where will the newspapers stand? Will a newspaper have the right to tell a dealer that he must sell the Star Weekly, for instance, for ten cents and the Globe and Mail for five cents, or is the dealer to be free to use

newspapers as loss leaders if he wants to and sell them to the public at any price he wishes?
Then there is one other group that is very much concerned, the Drug Trading Company, to which I have referred. They operate under the name "I.D.A.", or "Independent Druggists Alliance" and have over 1,500 drug stores. They co-operate in their advertising. I have here one of their advertisements taken from a Toronto paper, and they tell me it applies to about 400 stores. The same articles are sold in all these stores. I am told that a group of retailers who are appointed for the purpose by the association are called in every Monday morning to decide on the prices which will be advertised for a whole host of articles. The I.G.A. or Independent Grocers Alliance, follows the same practice. A number of grocery chains follow the same practice. Is such advertising to be illegal under this legislation? If the minister will answer some of these questions when he gets an opportunity to speak I think it will clarify the situation.


Stuart Sinclair Garson: May I ask my hon. friend a question which I think has some bearing upon what the answer to his question will be. My hon. friend says that these gentlemen get together and set the prices that are put in the advertisement. Does he mean that they literally set the prices or that they merely agree upon articles that are to appear in the advertisement, the prices of which are determined by some other method?


Joseph William Noseworthy: They agree upon the price which is to be advertised for any given article. I understand the practice is for stores to sell the goods at the advertised price, but there is no compulsion upon them to do so. Occasionally there are stores who undersell and some who oversell the advertised price.


Stuart Sinclair Garson: In a word, is the agreement to which the hon. member refers an agreement as to the advertisement or an agreement as to the price?


Joseph William Noseworthy: It is an agreement as to the price which shall be quoted in the advertisement.


Mr. Rodney Adamson (York West):: Mr. Speaker, I think I can finish what I have to say before one o'clock. First of all I should like to say that I agree with a great deal of what the hon. member for York South (Mr. Noseworthy) has said. However, when we suggested that a fair trade board be set up, it was not our contention that it should deviate in any great measure from the sort of suggestion that was made by the drug trade. I believe some measure of regulation

has been found to be beneficial. I was certainly attempting to show that when I spoke on the subject, and I am glad the hon. member agrees with those of us who take the view that this is an important economic rather than political subject. I hope every member in this house is seriously trying to find a way to overcome the serious inflation which is hitting the country today.
If this bill in any way assisted in overcoming this inflation, I would most certainly be in favour of it. We have to judge the thing, however, on the basis of the greatest good for the greatest number. On one side you put the possible advantages to the consumer, on the other the inherent dangers to the retailer. If there are price wars and the consumer is in a position to purchase goods subject to drastic price cutting, there will undoubtedly be some bargains as a result of this legislation. On the other hand the history of price wars, as we have seen them, shows that these bargains will be rather illusory. Once the pressure is off, and the pressure must come off ultimately, prices will return to their former level or, if the recent price war in New York is any criterion, to a higher level. On the other side there are the small retailers, druggists and specialty shops. They evidenced a genuine fear of what is likely to happen to them through the creation of the more powerful monopolistic retail colossi which this country seems to breed. Their fear is genuine, their arguments impressive.
We have these two things to balance. The one group expresses a genuine fear, and for the other group there is a nebulous possibility of some benefit. They may be able to purchase brand name objects a great deal cheaper through the loss-leader device. In my view the danger of the harm to the small merchant outweighs the temporary and I fear rather illusory benefit to the few consumers who will be able to buy brand name products for a time at a great saving. I shall, therefore, oppose the bill as I have done in the past.
In conclusion let me say that serious measures will have to be taken to stop inflation. So far we have just toyed with the subject. We believe, and I believe a very large section of the Canadian people still believe, that they can profit by inflation. Apparently the government is still of that mind, because they believe that inflation is-certainly up to now beneficial and it has been and I think unfortunately still is-politically popular. Measures to stop inflation are always unpopular. The longer this country goes on without taking those measures, the more drastic and more unpopular they will be,
Combines Investigation Act when our economic salvation demands immediate action. When I say that, Mr. Speaker, I only hope that the government will see the real danger signals ahead before it is too late, and not bring in measures such as this which will have practically no effect in curbing the monstrous evil that is inflation. Time is short, terribly short.


Mr. Speaker:: Mr. Garson moves, seconded by Mr. Fournier (Hull), that this bill, entitled an act to amend the Combines Investigation Act, be now read the second time. Is it the pleasure of the house to adopt the motion?


Some hon. Members:: Yea.
NAYS Messrs:
Adamson	Fraser
Aylesworth	Fulton
Blair	Gibson
Brooks	Graydon
Cardiff	Hees
Casselman	Hodgson
Catherwood	Lennard
Charlton	Macdonnell (Greenwood)
Churchill	McLure
Courtemanche	Murphy
Coyle	Nowlan
Diefenbaker	Hoss (Souris)
Dinsdale	Tustin
Drew	White (Middlesex East)
Fairclough, Mrs.	-30.
Fleming


Mr. Lesage:: I was paired with the hon. member for Three Rivers (Mr. Balcer). Had I voted, I would have voted for the motion.


Mr. Browne (St. John's West):: I was paired with the hon. member for Yukon-Mackenzie River (Mr. Simmons). Had I voted, I would have voted against the motion.


Mr. Speaker:: The question is now on second reading.


George Alexander Drew: One o'clock.


Mr. Speaker:: Does the house wish me to put the question?


George Alexander Drew: One o'clock.


Mr. Speaker:: Order. It is now 1.20 p.m. I will therefore leave the chair and put the question for second reading immediately upon returning to the chair. Normally, we would reassemble at two o'clock. It is now 1.20 p.m. Would it meet with the wishes of the house if we reassembled at 2.20 p.m.


Some hon. Members:: Agreed.


Some hon. Members:: Two o'clock.


Mr. Speaker:: I would like to know what the wishes of the house are.


Mr. Fournier (Maisonneuve-Rosemont):: 1.30 p.m.


Mr. Speaker:: I cannot hear what was said. Therefore I will leave the chair and the house will reassemble at two o'clock.
At 1.20 p.m. the house took recess.


Some hon. Members:: Nay.


An hon. Member:: On division.


George Alexander Drew: No.


Mr. Speaker:: Call in the members.


Donald Methuen Fleming: Section 1 of the bill proposes to write a new section 37A into the Combines Investigation Act. There are some difficulties as to its meaning that at once confront anyone reading this proposed section 37A. I draw your attention, first, to the fact that subsection 1 defines the word "dealer" in terms broad enough to include a manufacturer, a supplier or a vendor of an article. Subsection 2 purports to prohibit any act on the part of a dealer by threat, promise or agreement to induce or attempt to require any person to resell an article at a specified price under the named conditions. Subsection 3 purports to make it illegal for any dealer to refuse to sell or supply an article to any other person because that other person has refused to sell the article at prices as specified under the conditions named or has actually resold or offered for sale articles at prices less than those specified by the dealer.
I point out at once that there is nothing in the section dealing with the retailer. This section does not purport to deal with the act of the retailer in selling goods; it concerns itself only with the manufacturer or supplier of the goods who at an earlier stage has dealt with the retailer.
Combines Investigation Act
Some very serious questions are being asked throughout the merchandising trades of this country as to the effect of this section on a number of quite wholesome and natural commercial practices. At the present time many manufacturers and suppliers are getting out their seasonal catalogues for use in the new year. Many firms are supplying their representatives with these catalogues for their trips commencing with the beginning of the new year. This raises a very lively and urgent question. What is going to be the effect of this section on the current practice of naming prices in catalogues? Very often prices are suggested by the manufacturer or by the supplier who may be a wholesaler or a general jobber. He puts out a catalogue with retail prices named in it. These prices very often indicate what are con sidered in the view of the manufacturer, wholesaler or supplier to be reasonable prices for resale. It is not necessarily a case where any agreement is involved or any threat or inducement, but I am informed it is quite a general practice in the case of the printing of such catalogues. It seems to me that this becomes a pressing and urgent question and one of far-reaching importance affecting many of the merchandising trades in this country.
There is another question that has an important bearing. Probably it affects the pharmaceutical industry more than most of the others concerned. It is the practice, in the larger centres at any rate, for a good many of those operating pharmaceutical outlets, to unite in one large advertisement of articles that are under the system of resale price maintenance. If the system of resale price maintenance is to be made illegal now, what is to become of the practice, and a perfectly natural and quite proper practice it is, of pharmacists uniting in the publishing at their joint expense of large advertisements that would be beyond the means of any one of them? At the present time this is the only means that the smaller pharmaceutical outlets have for holding or trying to hold their own with the large outlets.
It is a very simple matter, as you will realize, Mr. Chairman, for the large departmental store or chain to take a whole page in a large city journal for the advertising of their sales or whatever it is in particular that they are featuring in the day's advertisement, but your small retailer cannot afford to go in for advertising on a scale of that kind. Therefore those interested in the same type of merchandise have in many cases made a practice of sharing the expensive advertisements of articles that they are

Combines Investigation Act all engaged in selling. Many of them are asking quite seriously and with a good deal of concern what is now to become of that practice. If it becomes illegal for them to join together in advertising articles for sale, the articles being sold at the same price in all their stores under the system of resale price maintenance, they are simply not going to be able to hold their own in the field of advertising.
Advertising is expensive, and small retailers cannot hope to compete when it comes to advertising. These are just two illustrations out of many that one could choose indicating the type of question that is very naturally and seriously troubling many retailers in this country. I have no doubt that this new section, if enacted, is going to be the subject of not a little judicial construction because of the complexity of the language used and the no little difficulty that one can see at a glance in its interpretation. These two instances I have singled out especially are troubling a great many people at the present time. I hope some statement can be made on behalf of the government to clarify the situation and to set clear limits on the effect of the proposed new section 37A, because if the offence to be created here is not defined in the clearest possible terms, and if its scope is not to be restricted so as not to include quite proper practices, then even more harm is going to be done than many of us see likely to follow from the bill.


Stuart Sinclair Garson: I think perhaps I should say
a few words in reply to my hon. friend's questions. With regard to his first question, namely whether under the proposed legislation a manufacturer can name what he regards as an appropriate retail price for his product, I think there is no doubt at all that he can do so provided that the manner in which he does it does not constitute an attempt to require or induce the retailer to sell at that price in contravention of subsection 2 of the new section 37A as proposed in the bill. As I have said before in the debate, any manufacturer who wishes to obey the law will have no difficulty in that regard in naming his price. If, however, he chooses to name it in such a way as to try to enforce or maintain it or to induce the retailer to abide by it, then he would in that even fall under the wording of the section.


Mr. Croll:: That was not the question,
was it? As I understood the question of the hon. member for Eglinton, it was the case of the man who issues a catalogue to the consumer. Was that not the question?


Donald Methuen Fleming: Not necessarily to the consumer. I am thinking in general of the catalogues put out by the manufacturer, wholesaler or jobber. In many cases that catalogue is put in the hands of a travelling or local representative who sells to the retailers. It is not simply the case of the departmental store putting a catalogue directly into the hands of the consumer. I am not thinking of that particularly. I am thinking of the broader question to which I think this section comes much closer.


David Arnold Croll: All right.


Stuart Sinclair Garson: I was quite clear as to what the hon. member meant. He asked whether at this time of the year, when the manufacturers are getting their catalogues ready for the coming selling season and are putting them in the hands of their travelling salesmen, it would be possible for them to indicate therein what they may regard as an appropriate price for their product? The answer is quite clear. It is quite permissible for them to do that provided they do not do so in such a manner as to attempt to require or induce the retailer to adhere strictly to these prices. The reason I enter that proviso is, as I think my hon. friend knows, that resale price maintenance where it has been practised has not been always, or indeed as a rule, the result of any written agreement or anything of that sort. It arises out of a course of dealings in which a travelling salesman may go to the retailer and say: Well now, these are our prices, and of course you understand that these are our prices. I hope you get my point. We would like you to realize that the manufacturer would like to have these prices maintained. Now, do I make myself clear?
If we ran across a set of circumstances of that sort, where there was pressure being brought to bear upon the retailer to maintain these prices with an indication that some kind of sanction was going to be imposed upon him if he did not, then I think that course of conduct would, if we could prove it, constitute an offence under this provision. But if the manufacturer in perfect good faith puts out a catalogue and says that in relation to a particular product he thinks the proper resale price should be $3, and he is prepared to sell it to the wholesaler and through the wholesaler to the retailer at that suggested price, there is nothing in that that would contravene the act, provided , it does not go any further. But of course when the retailer gets the article he has paid for it. It is his, and his pricing policy in relation to that article is perfectly free. He

Combines Investigation Act
does not have to adhere to the $3 if he does not wish to do so unless the manufacturer has set the $3 as a maximum price in which event not only can he fix the maximum price but he can also enforce it.


Gordon Knapman Fraser: Would that prevent the manufacturer from putting tags on the articles he sells indicating prices of $3, $4, $5, or whatever it may be?


Stuart Sinclair Garson: No.


Gordon Knapman Fraser: They can put their tags on as they are doing now?


Stuart Sinclair Garson: Yes. For example take ladies hose of fine quality marketed in a container, and the suggested price is $2. That is quite all right but the manufacturer must not take any steps which could be regarded as an attempt to induce the retailer to sell at that price, and not less than that price.


Major James William Coldwell: What about the position of an automobile or farm implement company which more or less compels the distributor to take a certain quantity at a certain price, and the agency is the sort of agency in which the retailer, if you like to call him such, does take the responsibility of buying and selling a quantity of goods and obtaining a certain amount of supplies for repairs and all the rest of it. Under this bill would the retailer be entitled to make his own arrangements regarding price or must he conform to the manufacturer's wishes because he is something of an agent for that manufacturer? It seems to me it is complicated, but I should like the minister to tell us what happens in that case.


Stuart Sinclair Garson: I think I clearly understand the hon. member's question because he has explained it with his usual lucidity, but perhaps he will permit me to draw a distinction with respect to the type of agency about which he is speaking, the so-called agent who owns his own business and buys his goods from the manufacturer and then resells the goods belonging to the so-called agent. Actually, he is not an agent in the strict sense at all, but a dealer in those goods.
Before I go on to answer the question, 1 should like to contrast with that gentleman a man who is an agent for a manufacturer in the true sense of the word. He may own his place of business, but the goods which he handles belong to the manufacturer and continue to belong to the manufacturer until title passes from the manufacturer to the consumer. In the case of which my hon. friend speaks, this bill will provide, when it goes into effect, that that dealer will be free to resell at whatever price he sees fit, and no sanctions can be imposed upon him for doing
so. In the case of the man who is the agent in the real sense, of course he will have, by reason of the nature of his arrangement with the manufacturer, to be guided by the manufacturer as to what price shall be attached to the goods.


Major James William Coldwell: There is just one point in that connection. In the instance which I had in mind, what happens if this dealer sells an automobile, we will say, at a price less than that at which the manufacturer says it should be sold, and the manufacturer says he is going to take the agency away from the dealer? What recourse has that dealer under those circumstances?


Stuart Sinclair Garson: Under those circumstances the manufacturer would be committing an offence under this bill.


Mr. Lennard:: Surely you can hire and fire.


Stuart Sinclair Garson: I shall deal with that point in just a moment. If the manufacturer refused a further supply to the dealer because the dealer had sold for less than the maintained price, the manufacturer would commit an offence under this bill.


Major James William Coldwell: So that the bill gives some security to that dealer?


Stuart Sinclair Garson: It does indeed. If, however, as the hon. member for Wentworth has interjected, a question arises as to whether a man can hire and fire, I believe, if I understand the point he meant to make by his interjection, that the manufacturer should continue to have the right, notwithstanding the passage of this bill, of terminating an arrangement with the dealer which was unsatisfactory to the manufacturer for reasons other than the cutting of the suggested price. If, for example, because the dealer was intemperate and did not attend to business he became a poor credit risk, or if he maintained a slovenly establishment which was a poor advertisement for the manufacturer's product, or for a number of other reasons, there was legitimate cause for the manufacturer to terminate the arrangement according to its terms, then the termination would not be an offence under this proposed law.


George Alexander Drew: Who would establish the measure of tidiness that must be maintained?


Stuart Sinclair Garson: I mentioned that, but perhaps it is not a very good example.


George Alexander Drew: I think it is excellent, because it just indicates the world of make-believe in which this whole thing is being discussed.


Stuart Sinclair Garson: I shall be glad to discuss my hon. friend's point. If the manufacturer has a dealer who has failed or refused to sell the manufacturer's products at the suggested

Combines Investigation Act resale price and the manufacturer refuses to supply that dealer with renewal goods or takes any other action to force him into maintaining the suggested price, then the manufacturer would be guilty of an infraction of this legislation. If the manufacturer, however, took any action in relation to his dealer, such as the cancellation of his contract or the refusal to supply him with more goods, not because he had reduced the maintained price but for other good and lawful reasons, then the fact that the manufacturer has taken that action would not, of itself, be an offence under this proposed legislation. Whether or not the action of any manufacturer would fall in one category as offence under the act or as a lawful action under the contract would depend upon the evidence that was laid before the courts. The judge would have to decide that issue.
The hon. member may say that is all in the land of make-believe, but if that is so then almost every lawsuit that comes before the court involves questions of fact of much the same character. The judge has to decide whether the reason for the cancellation of the arrangement is the failure to maintain a price or whether it is some other valid cause of action. In actual practice I would not think there would be any great difficulty in a competent court reaching an opinion on a question of fact of that sort.


Gordon Knapman Fraser: Would that apply if the dealer sold at a higher price instead of a lower price?


Stuart Sinclair Garson: No, it would not under this bill. I had better withdraw that answer and amplify it a bit to make it not only responsive to the question but also accurate. While the manufacturer cannot, under this bill, set a minimum price or a price below which the dealer may not sell, he can set a maximum price above which the dealer cannot sell. That maximum price which he can impose, he can enforce by whatever methods he may now be using to enforce resale price maintenance. In other words, in the legislation a provision is made that if a manufacturer wants to protect the consumer by assuring himself and the consumer that the consumer shall not have to pay more than a certain figure-we will say $5 for a hat-he can fix a maximum price of $5, and he can take whatever steps may be necessary to make that $5 resale price stick, that the dealer cannot sell for above that price; but if the dealer wants to, he can sell below it.


Gordon Knapman Fraser: He can mark in the hat at the factory: This hat is to be sold for $5?


Stuart Sinclair Garson: Surely.


Gordon Graydon: I should like to ask the
minister a question which has been causing me concern as the debate has been proceeding. One of the things I want to be clear on is this. Suppose the manufacturer is selling regularly to a retailer one or more articles of merchandise in the usual course of business, that the retailer is purchasing from the manufacturer directly and is paying the manufacturer according to the pricing arrangements they have. Then suppose the manufacturer and the retailer decide that that relationship is going to be changed and that the retailer is no longer going to act in his independent capacity but will be the agent for the sale of those products of the manufacturer. Is it possible, under this legislation, for that change of relationship to take place? If it does, then of course, as I understand the bill, it comes outside the terms and provisions of this legislation.


Stuart Sinclair Garson: It will come outside the
provisions of the act itself provided that the arrangement, to which my hon. friend refers as an agency arrangement, is an agency arrangement in the strict sense; that is, in the sense that the dealer will give up his own identity in the control over his own business and enter into an arrangement with the manufacturer under which, to all intents and purposes, he will become an employee of the manufacturer doing as the manufacturer tells him to do, and under which the manufacturer will own the goods and direct him as to what he is to do. If that is the arrangement, then of course the principals in the contract of sale will no longer be the dealer and the consumer but will be the manufacturer and [DOT]the consumer, and the commercial identity of the former dealer will be lost entirely. He will be submerged in the identity of the manufacturer.
The reason why I rather emphasize that distinction is that there is a term that is quite commonly used; it is said that such and such a firm is the "exclusive agency" in such and such a city for such and such a product. I am under the impression that in [DOT]the majority of cases in which that arrangement is made, the so-called exclusive agency means nothing more than that the manufacturer sells goods to this dealer who buys [DOT]them, pays for them, owns them and as a principal himself resells them to the ultimate purchaser, and that the only basis for the term "exclusive agency" is that that manufacturer chooses to deal with that particular dealer because he is a man of repute and of reputation in the community, and the manufacturer has goods of a high quality and

wants to deal with a high-quality representative. But he is not an agent in the sense in which I think my hon. friend was using the term.


Gordon Graydon: My point was this, if I may extend it a step further. I did not have in mind that the retailer would be the employee, for instance, of the manufacturer. I had in mind that he might perhaps be an agent, that the goods might be sent on consignment to the retailer and that a commission would be charged by the retailer upon the sale when it was made. The goods, I take it, would then of course be at the risk of the manufacturer until the title had passed to the ultimate purchaser. But if that is the case- and this is the reason I raised the question- it looks as though if any manufacturer decided to adopt that course of creating a bona fide agency arrangement between the retailer and himself, this act would be of no avail whatsoever in the protection either of the consumer or of business generally. If that were to be done on a broad-scale basis, this act would be just so much eyewash from the point of view of protecting those parts of our business that the minister has in mind giving protection to. That is the point I wanted to be made clear upon because it seems to me that if you are going to have an act it ought to have some powers and it ought to have reasonably wide coverage or else not be brought in at all. But if what I have suggested is the case, I can see exactly what is apt to happen-as can the minister and everybody in the committee who has some relation to business-namely, that you are going to find that the people the minister is trying to take a crack at in this legislation are not going to be there when he cracks the whip. That is the position I should like to be made clear on.


Stuart Sinclair Garson: With great deference, Mr. Chairman, I must say that I do not entirely share my hon. friend's apprehensions in that regard. He knows as well as we all do that at the present time we have, under the present system of resale price maintenance, a large number of these business concerns in which, the manufacturer retains control of his product until it is sold to the consumer. You find that situation in the clothing trade, the candy trade and in a number of others. In that case the manufacturer has made a decision that he, as a manufacturer, can take on the secondary function as a distributor and that he, in his capacity as a distributor, can distribute his own goods more satisfactorily and more economically for himself than he can by selling them to the trade. The independent retailers and the independent wholesalers of the country are facing that kind of 94699-1561
Combines Investigation Act competition right at the present time in all of these fields. I do not think for a moment that the passage of this bill will alter to any substantial extent that competition that now exists; but I should have thought that the decision of the manufacturer to enter into the distributive trade would probably be inspired or affected to a far greater extent by other considerations than by the passage of this bill. If up until the present time he has not felt that there was any particular advantage to him to get into the distributive business, I do not think that the passage of this bill is going to drive him there. For that reason I do not share my hon. friend's apprehension. I think the point that he makes is a colourable one, shall I say; there is point to my hon. friend's remarks. But I think that we will find that there will be no great increase in the fairly substantial amount of manufacturer distribution which is being carried on at the present time. I do not think that will likely change because that is very well established, as my hon. friend knows, in most of these cases like the Laura Secord people and the Tip Top Tailors and so on.


Donald Methuen Fleming: Before the discussion goes too far afield, will the minister come back to the other question I asked him originally in regard to the joint advertising project carried out by the retailers selling the same type of product?


Stuart Sinclair Garson: I will be glad to do so, but I was going to say with some reluctance. I guess there is an inconsistency there. I am a little bit reluctant to do it for this reason. I do not know whether the hon. member for Eglinton was in the chamber when I was asked questions during the debate on second reading on this very point, but the hon. member for York South-


Donald Methuen Fleming: Yes, I was present. His question was similar to the questions I have asked.


Stuart Sinclair Garson: That is correct. Perhaps my hon. friend will recall that I asked a counter question as to just what it was that was done before this advertisement was put in the newspaper. Did the gentlemen who got together each week to draft this advertisement agree as to the contents of the advertisement, or did they agree as to the price of the articles that were advertised in the advertisement, because if they agreed-


Donald Methuen Fleming: I will clear that up. These articles in the given case I take it are all price-maintained. Here is a group of retailers who are selling the same group of articles, in each case at the same price. They are not fixing the price, they are simply following or applying the policy of price-maintenance, laid down by the manufacturer. In their case,

Combines Investigation Act what is going to become of these advertisements? Are they going to be denied any opportunity of sharing together in advertisements of the same articles, as they are doing at the present time. A joint advertisement is the only way in which numbers of these smaller retailers can hope to compete with the big full-page advertisements of the larger retail outlets.


Stuart Sinclair Garson: I appreciate the manner in which my hon. friend has elucidated this point, but he has hardly met my difficulty completely, I think, for this reason. A case of this sort, as I am sure my hon. friend as a lawyer would agree, depends to a very large extent indeed upon the facts. What my hon. friend is asking for really is a legal opinion as to what effect this legislation would have upon a certain practice which he says is being followed. If I say that it will have no effect, and then it turns out that my hon. friend's information as to just what is done at these meetings is inaccurate, it would be very difficult for me to convince anyone afterwards that I gave advice upon a certain set of facts, and the real facts were different from those which he had represented to me. In saying this I am not questioning his veracity; not for a moment. Perhaps I can answer his question in this way. If in fact these gentlemen at these meetings at which the text of the advertisement is agreed upon did reach an agreement as to prices, then that, I apprehend, would be unlawful not under this new amendment but under the existing Combines Investigation Act, provided that it was significantly preventing competition to the public detriment.
If, on the other hand-this is the case that my hon. friend poses-these prices were maintained prices which have been up until the present time quite legal-I understand that is what he contends-and that the advertisement advertises such maintained prices, then the passage of this legislation would make it impossible to advertise maintained prices because maintained prices themselves are made illegal by the bill.
Whether or not what my hon. friend has stated-and what I am stating by way of reply-is in accordance with the actual facts of the case, I am not in a position to say, and I would very much prefer that no person should take this exchange between my hon. friend and myself too seriously until we get the actual facts of the case before us and express an opinion concerning them.


John George Diefenbaker: That warning is unnecessary.


Donald Methuen Fleming: This is an extraordinary procedure. The Minister of Justice has said: Now, I have made an answer, but do not let anybody think I am bound by it.


Stuart Sinclair Garson: No.


Donald Methuen Fleming: We are not asking free legal advice from the Minister of Justice; we are asking for the government's interpretation of this legislation. I prefaced what I had to say on this subject by indicating that so far as my reading of this section is concerned, it just abounds with difficulties as to its meaning. It seems to me that this is a section that, when it is submitted to judicial interpretation, is going to present very great difficulties. That is why I think we wish to understand now just what it is we are dealing with. The case that I put before the minister was put for illustration. I think that he has in his answer introduced all the qualifications, surely, and all the statements of pertinent facts that are relevant to his answer. But I think when he does qualify his answer to his heart's content or introduces all kinds of hypothetical circumstances, surely when his answer is given we are entitled to understand that that is a considered answer and the government's view as to the effect of this legislation. I emphasize again, this is not an idle question.


Stuart Sinclair Garson: On a question of privilege, before my hon. friend goes away from this point, I should like to make it clear, if I have not already done so, that I have tried, and I think successfully, to give an answer to the set of facts which my hon. friend has posed as the basis for his question; and I am quite willing to be accountable for that answer to his set of facts. But what I have suggested, with all respect, and not in any way questioning his veracity, is that it may well be that the real facts are not as he imagines them to be. I am simply uttering a note of warning that to the extent that the real facts are different from those which he has suggested, then to that extent my answer will not apply to the real facts. In other words, I do not want my hon. friend, nor do I want the Drug Trading Company, or whatever the organization is, to say, on the basis of the answer I have given to the facts stated by my hon. friend that, well, we are out in the clear on the basis of the real facts; but if the real facts are as stated by my hon. friend-and they may very well be-then I stand right behind my answer.


Donald Methuen Fleming: I do not think anyone would ever propose to hold the minister to an answer except in terms of the question, and the question in this case is surrounded by

what I thought was an ample statement of the understood facts. Certainly, the minister has predicated his answer upon the correctness of the facts as stated. Indeed, he has gone further and introduced a number of qualifications and hypotheses that surely qualify his answer to his own satisfaction. That answer having been given, I think the committee is entitled to feel that it is a considered answer; that it is the government's understanding of the legislation that it is introducing, and that it is its legislative purpose in connection with this measure.
I think this question must be considered further. This is not an idle question; this is a very serious matter for a great many retailers because, as I have indicated to you, the only way in which they can hope to compete in advertising with the large retail outlets is by association together, pooling *the expense of advertisements.
Now, we are told on the one hand that if today they are going out to fix prices by a combination among themselves in a manner detrimental to the public interest, that is already contrary to the act. And we are told on the other hand that if this is not that case, but is simply a case of resale price-maintenance, laid down by the manufacturer who supplies these goods to all retailers, on these or similar terms, for sale at the maintained price, such practice is to become illegal.
But that is not the end of the question. The manufacturer is quite at liberty to indicate the maximum price. We have already been told that he is at liberty to suggest what he considers a fair price, so long as he does not attempt to lay down sanctions as applied to anyone who does not choose to follow his view as to fair price. But what is to be the position of a group of retailers in the same business who, in the light of a maximum price indicated by the manufacturer or a fair price suggested by the manufacturer, choose to unite together in publishing an advertisement which says, for instance, that the John Jones tooth brush is to be offered for sale at an indicated number of pharmaceutical outlets at a price of fifty cents, and that, we will say, a particular type of toothpaste is available at that group of pharmaceutical outlets at a price of forty-nine cents? There may be a dozen other articles in the same advertisement.
This is a very important question. It is something that agitates pharmacists and merchants who are motivated in their business dealings by the highest purposes. Their operations are honourable and above reproach. They keep within the law. They
Combines Investigation Act obey the law, and they wish to continue to do so. At the same time they do not wish to be exposed to the ravages of unfair competition at the hands of big and powerful retail outlets.
In the case I have put before the minister, I do not think we have had by any means an adequate answer to the question. Assuming that this legislation passes, what is the position with respect to the desire of those retailers who are interested in the same type of commodity to associate themselves in a common advertisement?


Mrs. Fairclough:: Following up the same question, I should like to ask the minister if I understood him to imply that the joint advertising done in the past by groups of independent retailers or by voluntary chains contravenes the Combines Investigation Act. Also, whether they did or not, and if there is any question at all as to the legality of the joint advertising, who will be guilty? Will the retailers themselves be the ones charged, or will the newspapers be deemed guilty by reason of having published these advertisements?


Stuart Sinclair Garson: Mr. Chairman, the question asked by the hon. member for Hamilton West is pretty good proof of the difficulty which arises in reply to questions such as that asked by the hon. member for Eglinton. The substance of the question of the hon. member for Eglinton was this: Can these druggists continue to advertise maintained prices? My answer was that since resale price maintenance will be banned by this legislation, it will be impossible to advertise maintained prices. That is my answer.
I did not say that they could not have joint advertising, which is a different question entirely. The difficulty arises in a matter of this kind, as any lawyer with any experience, such as that of the hon. member for Eglinton, will tell you, that the first thing counsel wants to know when asked for an opinion is this: What are the facts of this case? He wants to know what the real facts are-not the hypothetical ones, but the real ones. He will not give an opinion until he is told the facts clearly.
If the hon. member for Hamilton West has a different set of facts in mind, that there are not going to be maintained prices in some other type of advertising, then that indicates another answer.
My point is that this sort of question and answer procedure in committee is more likely to create misunderstanding than to illuminate the subject. One cannot express an opinion until he knows exactly what it is

Combines Investigation Act that these gentlemen propose to do. We are doing these men a disservice until we can consult with them and find out what it is they have in mind to do alter the act is passed. Then we can tell whether they will be acting in compliance with the act.


Ellen Louks Fairclough: I think it is fairly obvious that what they want to do is to proceed in the manner in which they have in the past.


Stuart Sinclair Garson: Yes.


Ellen Louks Fairclough: I should like to ask the
minister whether it was his intention to indicate that this joint advertising has in the past run contrary to the provisions of the Combines Investigation Act. I gathered that from some of his remarks. I wonder now just what happens to this group of retailers. They are probably a voluntary chain-and I presume the minister understands that when I refer to a voluntary chain I mean that each store is independently owned and that they group together for purposes of identification. Each person, however, is the owner of his own store, and his association with other members is purely voluntary. In the past they have published advertisements jointly. Of course they would have to agree on the prices which would go in those advertisements. They would have to agree, because the very fact that they put their names to the advertisement would mean that they agreed.


Stuart Sinclair Garson: No. Perhaps my hon. friend
would permit me to interrupt. I think this would be an excellent interruption, if I may be permitted to say so. I assume that they do not agree at all. But if not, were they not advertising drug prices-


Mr. Hees:: Not necessarily at all.


Stuart Sinclair Garson: Just a moment, now. Were
they not advertising drug prices which had been fixed at the manufacturing level by resale price maintenance?


Ellen Louks Fairclough: No.


David Arnold Croll: He is trying to help you.


Stuart Sinclair Garson: Because if they did not, if
they got together among themselves to fix prices as a horizontal combine, then that would be in contravention of the act-not this present bill, but the act itself. That would be so, provided competition was eliminated to some extent by their action in so doing.
So their problem, it seems to me, is this- and these are not the best auspices under which to discuss it-their problem has been that under a system of lawful resale price maintenance, under which manufacturers

have fixed resale prices of these products, they could publish joint advertisements. Having regard to the fact that resale price maintenance is lawful, and that it is lawful to advertise, the advertisement would be quite all right.
But now the question arises as asked by the hon. member for Eglinton: If we ban resale price maintenance, can they continue to do that? And of course if we ban maintained prices, the presumption arises at once that they have agreed to fix the prices themselves. Perhaps I would illuminate the subject a little more if I were to put it this way-although this perhaps is a ridiculous supposition: Let us suppose that these gentlemen pool their resources in advertising. From what the hon. member has said, I understand that they are all independent. If their prices were not the same on different products, there would be no question at all, because there would be no suggestion or thought of their being the same. But it has always been the law that dealers cannot get together to fix prices at which they are going to sell their products. If they do so and do it to the extent that it is contrary to public interest by a significant reduction in competition, then that would be an offence under the act. I assume that up until the present time they have just been advertising resale-maintained prices?


Ellen Louks Fairclough: That is not the fact and that is not what I meant. I take it from what the minister has now said that it is quite legal for A and P or Loblaw's or Dominion Stores to publish full-page advertisements indicating that you can buy ketchup in any store for twenty-seven cents, but it would be against the law apparently for a chain composed of independent merchants to publish the same advertisement and say that you could buy ketchup at any of their stores for twenty-seven cents. That would be considered collusion.


David Arnold Croll: He did not say that.


Ellen Louks Fairclough: That is what it sounded like to me.


Stuart Sinclair Garson: This just illustrates-


James MacKerras Macdonnell: The stupidity of the legislation.


Stuart Sinclair Garson: No. It just illustrates the difficulty of trying to give a legal opinion upon a set of facts asked by the hon. member for Eglinton, and again upon a somewhat different set of facts asked by the hon. member for Hamilton West, and so on.


An hon. Member:: They are simple facts.


Stuart Sinclair Garson: I think an exchange of this sort is doing a disservice to all concerned.


Ellen Louks Fairclough: These are the very things that are bothering merchants. I cannot see that it is doing a disservice to try to clarify the situation; quite the contrary. As a matter of fact, I was not talking about price-maintained articles entirely because a great many of the products and articles which are advertised jointly are not price-maintained nor have they ever been price-maintained. That is particularly true of food items. You see these big advertisements in the paper every Thursday where the chains advertise prices which will be in effect in their stores for the weekend buying. I asked the minister before whether that advertising would be contrary to the provisions of the Combines Investigation Act in the past.


Mr. Cannon:: If it is against public interest only.


Ellen Louks Fairclough: It does not matter whether they contravene the act or not, it is not a matter of whether it is against public interest or not; I would say that that is secondary. The question is whether one set of dealers or one dealer operating through a number of outlets can practise a certain advertising policy while another group which has chained together cannot.


Donald Methuen Fleming: May I point out to the minister that I think that he has quite overlooked an important feature of this bill. The question has to do with something done or undertaken by retailers. There is nothing in this bill that says anything about retailers. The proposed section 37A does not deal with acts done by retailers.


Charles-Arthur Dumoulin Cannon: They are included in the definition.


Donald Methuen Fleming: The definition of the word "dealer" is broad enough to include someone who sells goods, but look at subsections 2 and 3 and you will see that there is nothing there that applies to what is done by retailers.


Stuart Sinclair Garson: My friend's question concerned retailers.


Donald Methuen Fleming: That is my point and for that reason I think the minister's answer is in error. I think in undertaking to answer these questions he has completely overlooked the fact that this bill has no application to acts by retailers. It purports to apply only to those who are supplying or selling to retailers.


Stuart Sinclair Garson: Has my hon. friend looked at the definition of "dealer"?


Donald Methuen Fleming: I referred to the definition of "dealer" when I opened my remarks this afternoon and just now. It is quite true that the word "dealer" is defined in terms broad
Combines Investigation Act enough to include a manufacturer, a supplier or a vendor. But look at the operative terms of section 37A; look at subsection 2. There is nothing there that applies to an act of a retailer selling to a consumer. There is nothing in the bill that applies to that situation. I think the answer of the minister is in error.


Charles-Arthur Dumoulin Cannon: The minister's answer referred to the case of retailers combining together which would be illegal under the existing act, not under the amendment.


Donald Methuen Fleming: That was only one fragment of the minister's answer. He dealt with the situation that exists before this bill comes into effect. Whatever may be said about the correctness of his interpretation, certainly that has to be dealt with in the terms of the present legislation. The other question was as to the effect of this legislation on practices that exist. The minister has given a long answer which I think in the light of a proper reading of this section is quite erroneous.
This illustrates the importance of insisting on a discussion of this kind in committee. After all, what is a committee stage for except to probe into the terms of legislation like this and try to find out what they mean. Let us turn the sections inside out and see what they mean. We have been discussing this section for less than an hour and it seems to me that it is already apparent that the government does not understand the full extent of this legislation or what is involved and what is not involved in it.


Joseph William Noseworthy: I should like to follow up this matter of advertising with the minister. I understand that a firm like Loblaw's can publish a full-page advertisement in the Toronto papers indicating that certain items can be bought in any one of fifteen or twenty Loblaw stores in Toronto and suburbs at a given price. What we are trying to find out is what would be involved if an association like the independent druggists or the independent grocery alliance, each of which has a number of stores, get together and publish a joint advertisement and name the prices at which items may be purchased in each of their stores. Is that just as lawful as if Dominion Stores, A and P or some other chain did the same thing?
Here is a full-page advertisement indicating what I have in mind. This appeared in the Toronto papers, and similar advertisements appear many times through the week. A number of stores combine, and apparently there is no violation under the present act, or there has been no indication that there
2466	HOUSE OF
Combines Investigation Act is a violation. Some of the articles advertised are price-maintained, others are not. This has been going on for years. Will they still be permitted to publish these advertisements indicating the prices at which given articles can be bought in any of their stores?


Stuart Sinclair Garson: I shall make another attempt to make myself clear in this matter. There is nothing to prevent a group publishing a joint advertisement, but in practice that advertisement-I am not suggesting this about that particular group of people-and the business of getting together to agree upon prices that are to be published may be merely a cloak for a horizontal price-fixing agreement. If that were the case, if it were a cloak and they were really fixing prices, the mere fact that under the law they have a perfectly lawful right to join together to publish a common advertisement would be no protection for them if it could be established that they had fixed prices. If the crown were able to prove in a given case that fixing went on to the extent of seriously interfering with competition, and that is what we would have to prove in order to prove that it was contrary to public interest, that would result in a conviction. But if a group of men came together and in good faith published a joint advertisement of prices of goods that were not resale price maintained, and if we can all imagine that by the most extraordinary coincidence they all happened to have individually the same price for the same article in the advertisement, if those were the facts then it would be quite within their rights to have a joint advertisement provided they were not using it as a means of fixing prices in contravention of the act. My hon. friend may say that all that sounds extremely complicated. In any practical case that would arise, we will say for prosecution, it would be a question of fact for the court to decide whether this was a bona fide coming together in a joint advertisement or whether on the facts of the case there had been a contravention of the act. My difficulty in discussing this question is that I am being asked, upon a purely hypothetical set of facts, to anticipate what judgment a court would give upon them.


Joseph William Noseworthy: Will the minister show me what is the difference, so far as interfering with competition is concerned, when fifteen or twenty Loblaw stores scattered throughout Toronto and suburbs advertise a set price for every given article on their shelves in stores that have different overheads and staffs and where the cost of doing business is different? Loblaw's, because they are one firm, can have fifty stores and fix prices for every one of their stores, and you say it does not interfere with competition.


An hon. Member:: They are not conspiring with anybody else.
Mr. Nose worthy: If fifty independent dealers agree to advertise their prices that is interfering with competition and I should like to know what the difference is.


An hon. Member:: Loblaw's are all alone.


Stuart Sinclair Garson: When as a matter of policy in a country-for example, the United1 States, Canada or Great Britain which is now engaged in the task-it is decided to pass anti-trust or anti-combine legislation, they prohibit agreements reached between different concerns for the purpose of fixing prices over the whole field, or a significant part of the whole field, so as to achieve by that means the economic equivalent of a monopoly. When you prohibit an agreement, it is an agreement amongst various separate owners and proprietors of businesses. In the case that my hon. friend poses, while Loblaw's may operate twenty stores they are, as he well knows, all under one management. That management establishes the pricing for those stores but it does not establish it for the whole industry. They are subject to the competition not only of other chains and departmental stores but of all these other fifty retailers, thousands of other retailers, in that business.
If you say, by this ingenious point which my hon. friend has raised, that you are going to let groups of other people set prices by agreement, the practical question arises in the administration of legislation of this character as to just where you are going to draw the line. You have either got to prohibit price fixing agreements across the board or not prohibit them. If you do not prohibit them, then what happens, as has happened in certain industries which I will not name, is that everybody in the industry, at the retail level, the jobber's level and the manufacturer's level, gets together in one great arrangement that controls the price of the product from the time it is manufactured through all its stages until it reaches the consumer.


John George Diefenbaker: Would that not be an offence now under the Combines Investigation Act?


Stuart Sinclair Garson: For all who get together?


John George Diefenbaker: Would that not be an offence now if they all got together?


Stuart Sinclair Garson: Oh yes, it surely would be. It is an offence if they all get together, and it is an offence if less than all get together.


John George Diefenbaker: You said all.


Stuart Sinclair Garson: It would be an offence if the retailers got together in a horizontal agreement. It is an offence for the wholesalers

to get together in a common agreement. It is an offence for the manufacturers to get together, and if the whole bunch of them get together it is perhaps a more grave offence but it is still just an offence under the act. The difficulty which my hon. friend raises is one which arises out of the nature of legislation of this character. You are either going to prohibit price fixing agreements or you are not.


Some hon. Members:: Hear, hear.


Stuart Sinclair Garson: That is the character of the combines act, and all of this discussion for the past fifteen minutes has nothing to do with the bill. It has been on the combines act itself.


Joseph William Noseworthy: I understand it will be illegal for the 400 independent stores that form this voluntary group to get together, fix prices and advertise uniform prices. Yet it would be quite legal for these 400 stores to organize themselves into a corporation with one management and for that one management to fix the prices for the 400 stores.


George Alexander Drew: That is what it encourages.


George Harris Hees: That is what you are encouraging. Is that not so?


Joseph William Noseworthy: Am I correct in that assumption?


Stuart Sinclair Garson: What is involved there is the surrender of the independence of every one of these proprietors to a larger concern. I think my hon. friend is right to this extent, that in dealing with arriving at agreements in contravention of the act you have to treat each proprietor, large and small, as an entity whose consent is a necessary feature in any agreement that he may reach with others to fix prices in contravention of the act. My hon. friend is quite right that it does not make any difference whether it is a large or small dealer. He acts as an individual and his consent is necessary to arriving at that agreement.


Mr. Ross (Souris):: I think this bill is very confusing to a great many retailers. I have had considerable correspondence with executive members of the Canadian farm implement retailers association. You have partly cleared up the difficulty with the reference to the automobile agency or large farm implement agency that may lose its contract. I think the majority of the larger farm implements are handled on a catalogue basis. The prices are set out every year by the larger companies not only for their machines but for parts and repairs. In many cases that I know of a genuine agent handles these farm implements. He sets up an 94699-157
Combines Investigation Act organization by agreement with a company to service the implements over a term of years. He purchases his own property and in many cases he purchases the parts outright from the particular company and carries on that service. These people are quite worried as to whether or not the legislation will interfere with them. Every time they go to their shelves for a particular part they look up the catalogue put out by the farm implement company concerned and charge their customers on the basis of the catalogue price. They are very much concerned as to whether the legislation will interfere with their carrying on on that basis. As I interpret it, that is really price maintenance.


Stuart Sinclair Garson: When my hon. friend asks whether or not it interferes, what does he mean?


James Arthur Ross: Is it price maintenance? The minister pointed out to the hon. member for Rosetown-Biggar that a person could lose his agency for not carrying out the instructions of the company, and would come under this new legislation. Supposing someone comes along and reports one of those men carrying on this service. There is an investigation, and the dealer finds he is in difficulty for not adhering to this catalogue price. Is that considered as interference under this legislation?


Stuart Sinclair Garson: I am not sure that I understand the hon. member's point. Perhaps I had better restate it and he can take careful note to make sure that I am stating his point correctly. If at the present time the basis upon which the implement dealer gets his implements and repair parts from the manufacturer is that in reselling them he must charge the customer the prices that are set out in the catalogue or else he will lose his agency or have some form of punishment imposed upon him-is it the hon. member's view that is the situation?


James Arthur Ross: I am told it is not a hard and fast contract, but it is a suggested price. Nevertheless, I do know what has happened in many cases where the dealer has deviated from that suggested price.


Stuart Sinclair Garson: The manufacturer has withdrawn the agency?


James Arthur Ross: That has happened in some cases.


Stuart Sinclair Garson: The effect of this bill will be that the dealer who purchased his implements or repair parts from the manufacturer and has paid for them, will have title to those implements. If he wishes he can sell them at the suggested price in the catalogue to which my hon. friend refers, but if he wishes to

Combines Investigation Act sell them for less than that the manufacturer cannot do anything to him, as the hon. member says he is doing now.
If the hon. member regards the penalties which are now imposed on the dealer as objectionable in any way, then this bill will do away with those penalties.


George Harris Hees: Getting back to what we were discussing before the member for Souris spoke, it is obvious that the large grocery chains like A & P or Loblaw's can combine their advertising for all their stores, and therefore can afford to advertise the products sold at all their stores, at whatever prices they want. The small stores cannot afford to advertise singly, and that is why, in the past, they have combined in order to make it possible to advertise their goods and draw customers to their stores. In the future, in order to compete with these large chain stores, there will be great compulsion on them to merge together in order to advertise and maintain stable prices. This eliminates individual competition; and will mean that you are only going to have mergers of small units, and you are going to do away with the individual unit. Does the minister agree that is what this legislation will make it almost impossible to get away from?


Stuart Sinclair Garson: No; I do not agree with that at all, Mr. Chairman. It seems to me there has been considerable confusion of thought between the provisions of this bill, on the one hand, and the provisions of the Combines Investigation Act on the other. When I am asked to say what would happen on the basis of a certain set of facts, and to those facts the existing Combines Investigation Act is perhaps more applicable than this bill, I think in all honesty I have to give an answer in terms of the existing Combines Investigation Act.
Perhaps I could make this whole difficulty over advertising more clear if I put it in this way. It is now legal, and will continue to be legal after this bill is passed, to advertise all non-price-maintained goods which would include most of the groceries and will include nearly all goods after the bill comes into effect. I think I had better stop there, because that will leave a clearer impression in the minds of the members concerning the difficulty we have been discussing. It is a difficulty which does not arise under this bill at all, but is a difficulty under the Combines Investigation Act in its present form.


George Harris Hees: That is not an answer to my question at all.


David Arnold Croll: Perhaps we can clarify it. The trouble is that everyone is asking questions and getting different answers to the same

questions; that is what is bothering me. I am very unhappy about the answer that was given to the member for York South.


George Harris Hees: A new assistant.


David Arnold Croll: I do not know why there is all the shouting. You are trying to get an interpretation of an act, and I am not giving legal advice. I want to understand what this means. I shall give the minister a set of facts to see if I understand the bill. A, B, C and D are retailers who buy from manufacturer X. The suggested retail price is 10 cents. They all advertise the article at 10 cents in a joint advertisement. Under this bill is there anything illegal about that transaction?


Stuart Sinclair Garson: Under the present bill?


David Arnold Croll: Yes.


Stuart Sinclair Garson: The present bill has nothing at all to do with it.


Mr. Stuart (Charlotte):: A suggestion has been made that 300 or 400 retail stores might combine in order to obtain the same results as Loblaw's and A & P. The thought occurs to me that the only way that could be done would be for one company to buy out these 300 or 400 stores.


George Harris Hees: No.


Andrew Wesley Stuart: If these stores were run the same as Loblaw's, the managers and clerks would be on a salary. The stores would be united, and you would have exactly the same circumstances as those under which Loblaw's operate. But if the 400 grocers got together and decided they would form a combine-that is the suggestion here-and said they would come under the one head but run under their own businesses and just get together on price, then that would be a combine.


George Harris Hees: No, a merger.


Andrew Wesley Stuart: No, it is a combine. If it is not under one management and the managers are not on a salary, then it is a combine.


Major James William Coldwell: I want to follow up the question put by the hon. member for Souris. Supposing a manufacturer discontinued supplying a retailer without giving any reason whatever, or ostensibly for some reason other than cutting price, what is there in this bill to prevent that? Supposing a co-operative society wishes to buy a line of implements: can a manufacturer refuse to supply the dealer in the one instance or the co-operative in the other instance with that line of goods? Is there anything in this bill or in the Combines

Investigation Act which would enable either the dealer under those circumstances or an organized co-operative to get a line of goods such as implements, for example-that is perhaps what we are most interested in at the moment-without any discrimination whatsoever?


Stuart Sinclair Garson: I would refer my hon. friend, if he has the bill there, to subsection 3.


Major James William Coldwell: I have read that.


Stuart Sinclair Garson: It reads as follows:
No dealer shall refuse to sell or supply an article or commodity to any other person for the reason that such other person
(a) has refused to resell or to offer for resale the article or commodity
(i)	at a price specified by the dealer or established by agreement,
(ii)	at a price not less than a minimum price specified by the dealer or established by agreement,
(iii)	at a markup or discount specified by the dealer or established by agreement,
(iv)	at a markup not less than a minimum markup specified by the dealer, or established by agreement, or
(v)	at a discount not greater than a maximum discount specified by the dealer or established by agreement . . .
In other words, if the retailer has broken the price by selling for less, and the manufacturer subsequently refuses renewal of supplies or cancels the contract of supply, then I imagine what would happen is that a complaint would be made to the combines investigation branch, and we would inquire into the circumstances. If they revealed what seemed to be a case against the manufacturer, a charge would be laid; and when that was tried, the question of fact would be for the court to decide on the evidence as to whether the manufacturer, in refusing renewal supplies or in cancelling the arrangement with the dealer, did so in contravention of this section or whether he had other good reasons for doing so. If he had no other good reasons, and if the man was the same credit risk that he had always been and was doing a good job in every way, I should think that the conclusion which it would be almost irresistible for the court to come to would be that the real reason for the cancellation of the contract or the refusal for renewal of supplies was the fact that the price had been broken.


Major James William Coldwell: Having read that particular part of the bill, I had come to the conclusion that this rather restricted the grounds upon which a manufacturer could refuse to sell. It seemed to me that if we are really trying to bring about competition and to end this particular practice, we should simply have this clause read in this way:
94699-157J
Combines Investigation Act
"No dealer shall refuse to sell or supply an article or commodity to another person."
It seemed to me that we should stop there. Then every co-operative could obtain goods and every dealer could obtain goods; and once he obtained the goods and bought the goods, he could sell the goods in any way he liked. It seems to me that the clause should stop there if that is the intent of the bill.


Stuart Sinclair Garson: With all deference, Mr. Chairman, I think that my hon. friend has not given his last suggestion the careful consideration and good judgment that he usually gives to matters that come before the House of Commons; because if we made it the law that any manufacturer would have to sell goods to any person-


Major James William Coldwell: Who would pay for them.


Stuart Sinclair Garson: -who would pay for them, I would think that would be quite an extreme interference with the freedom of the individual, and much more so than anything that is contemplated in the whole of the act at the present time.


John George Diefenbaker: I have listened to the Minister of Justice, and I think he ought to pay a compliment to the hon. member for Spadina for applying a little bit of the common sense to which the Minister of Justice referred yesterday when he himself was discussing these sections. I do not know where we would have been but for the hon. member for Spadina and the assistance of the combines commissioner, although not on the floor of the house.
As to the present section, the point raised by the hon. member for Rosetown-Biggar is clear. The Minister of Justice seems to forget that with regard to prosecutions there is such a rule as that intent must be established; and the intent is fully set out in this section which says:
No dealer shall refuse to sell or supply an article or commodity to any other person for the reason that such other person
(a) has refused to resell or to offer for resale the article or commodity
(i) at a price specified by the dealer or established by agreement . . .
And so on. My hon. friend says that it is a question of fact. Certainly it is a question of fact that can only be determined if there is evidence upon which a court could determine it.


Stuart Sinclair Garson: That is right.


John George Diefenbaker: On the statement made by the hon. member for Rosetown-Biggar there is no authority under this act that will deny the right of any dealer simply to refuse to deliver any commodity, whatever it may

Combines Investigation Act be, as long as the reason is not given. That point indicates exactly how half-baked legislation comes before the House of Commons, without the care and the attention it should receive. While the endeavour has been to close the door, in fact the door has been opened. There is no onus upon the accused. The crown must prove, in the prosecution, that the dealer refused to sell or supply the article or commodity for the reason that the intended purchaser has refused to be bound by the resale price.


Charles-Arthur Dumoulin Cannon: Will the hon. member permit a question?


John George Diefenbaker: Yes.


Charles-Arthur Dumoulin Cannon: The hon. member said: If the reason is not mentioned.


John George Diefenbaker: Yes.


Charles-Arthur Dumoulin Cannon: Even if the reason is not mentioned for the refusal to supply goods, does the hon. member, who is a lawyer, not realize that the reason can be established by outside evidence?


John George Diefenbaker: Oh, yes.


Charles-Arthur Dumoulin Cannon: That is, by collateral evidence.


John George Diefenbaker: Oh, yes.


Charles-Arthur Dumoulin Cannon: Of the circumstances.


John George Diefenbaker: That is true.


Charles-Arthur Dumoulin Cannon: It does not have to be mentioned in the act.


John George Diefenbaker: That is simply an interruption that is meaningless.


Charles-Arthur Dumoulin Cannon: I beg your pardon. It contradicts what you were saying.


John George Diefenbaker: That is true.


Charles-Arthur Dumoulin Cannon: It is not meaningless for that reason, surely.


John George Diefenbaker: No; it is not meaningless to my hon. friend. But the point I am making is this, Mr. Chairman. By the section itself imposing the onus on the prosecution, the situation to which I have referred is possible, provided that there are no documents to the contrary or that there is no evidence to the contrary. If there is evidence, as my hon. friend says, then it will be established that the reason for refusal to deal was the refusal of the intended purchaser to resell at the resale price; that is so if there is evidence, either direct or circumstantial. But circumstantial evidence is certainly far different from what was referred to a moment ago as a principle by the Minister of Justice when he says that the courts may come to a conclusion as a fact that the reason for the

denial was the fact that the purchaser refused to be bound. There would have to be some evidence of that, either direct or circumstantial, as the hon member for Iles-de-la-Madeleine has said.
For two days the Minister of Justice has been telling the house how difficult it is to get convictions under the Combines Investigation Act. In the United States it takes three years to get the evidence. If this section is passed as it now stands, and an alteration is not made in the draft, there is no reason why any person in this country need fear prosecution. I refer particularly to implement manufacturers or distributors, automobile distributors and the like. I take those as examples. Under the law as we intend to pass it, if it goes through in its present form, the crown will have an impossible task in proving intent; for, as the Minister of Justice has repeatedly said, prospective wrongdoers do not leave any more traces or fingerprints than they can help. He pointed out yesterday, with such power and force, that these great corporations have outstanding lawyers to act for them. That was given as an excuse for the fact that in some of the prosecutions government counsel were less astute than they ought to have been in the prosecution, and in the results of prosecutions no doubt. The fact remains that under the section as it now stands the onus on the prosecution would allow every manufacturer in this country, without giving any reasons- he need give no reasons-to simply say: On and after a certain date I do not wish to supply you. If there is no more than that available, and no circumstantial evidence, as the hon. member for Iles-de-la-Madeleine mentions, then there can be no conviction. I also point out that under this legislation there is nothing that will deny any manufacturer the right to say that one prospective purchaser shall be on a quota, and one quota shall be small and another large.


Mr. Nowlan:: And that it will be six weeks before you get your order.


John George Diefenbaker: There is nothing to indicate that any offence will be committed if a dealer simply says: On and after this date, for no reason-and they will certainly set forth in the letter; we have no reason for doing this-your quota will be such and such. I point that out as a second weakness in the draft section.
As I see them, these two weaknesses can have the effect of parliament passing the section in its present form and constituting a threat, and effective in so far as commodities now on the shelves of the retailers are concerned, but ineffective as against any future

dealings that might take place. In its present form, as I see it, the section will be-and I repeat-ineffective in relation to the various retailers who have goods in stock. They will be able to sell them; but in so far as goods that are in the wholesalers' stocks today are concerned, and which will ultimately find their way into the possession of the retailer, the section as it now stands will, in my opinion, come within the ambit of Colonel Ralston's description of section 498A in 1936 when he used the scriptural words, a sham and a delusion. Certainly-and I am not going into the question of loss leaders at the moment, although I hope the opportunity does come before we conclude the discussion on this section-in its present form the onus is on the prosecution, provided that the manufacturer or the distributor does not openly advertise the fact that he is refusing to sell because of his belief or his knowledge that the intended purchaser is not maintaining the price; and he will have nothing to fear as regards commodities that have not yet been bargained for or delivered. I place this before the minister with some knowledge of what proof is needed in the courts and some knowledge of combines cases from both sides, prosecution and defence.
If the minister does desire to do more than use a smokescreen in order to delude people into believing that something effective is being done, then section 37A will have to be revamped in order to assure that too great an onus is not placed upon the crown. I think that subsection 3 (a) and (b) will have to be redrawn, otherwise the crown itself will be establishing in law what the onus must be. In my opinion, with proper defence, it would be most difficult if not impossible to secure a conviction for goods that are to be bargained for after the date on which this legislation comes into effect. I bring that to the minister's attention. He may say that it has been considered by the law officers of the crown. That does not in any way deter me from offering suggestions. The law officers of the crown have drawn many laws, and they have been passed by parliament, and on the first occasion that they have found their way into the courts for interpretation, judges who are in no way affected by sentiment or considerations such as that, determining the law, as it has to be determined, by what parliament passes, will not consider what has been said in parliament in determining the degree of the onus or the need of requisite proof in order to establish and discharge that onus.


Stuart Sinclair Garson: I think I should make a brief reply to my hon. friend and say that we are greatly indebted to get from him the opinion of a man who, as he has correctly stated,
Combines Investigation Act has had a great deal of experience in criminal law and in connection with the present act. I am glad to have this opinion. But it so happens that we have also had the opinions not only from the law officers of the crown to whom he referred, but from experienced officers who have had long years of work with the Combines Investigation Act.


John George Diefenbaker: Who are they?


Stuart Sinclair Garson: One of them is Mr. Whiteley, who has been with the department for many years, and another one is Mr. MacDonald, who is a former deputy attorney general of Nova Scotia, and who has been with the department for about three years, and a number of others besides. They do not happen to share the opinion which has just been expressed by my hon. friend, and I must say for my own part that I would be much more impressed with his opinion if he would just go on and state the text that he would suggest to tighten up the hole that he says is now in this section. If he cannot get his criticism down to more definite form than that, I think we shall have to continue to rely upon the opinions of our officers.


John George Diefenbaker: Well, Mr. Chairman, my submission is that subsection 3-of course I realize that the hon. gentleman is merely inviting suggestions not for the purpose of giving them consideration, because I found that to be the case in the past-I suggest that subsection 3 in its present form and paragraphs (a) and (b) reduce themselves to a nullity by reason of the particularity and detail given. It is not for me to draft the exact words, but I submit this: that no dealer shall refuse to sell or supply an article or commodity to any person without justification. That will place the dealer in a position so that the crown will not have to establish all of the details, but the onus will still remain on it. It will not have to establish all of the details set forth in paragraphs (a) and (b).
Booking at this, I must say I would be very interested in the first prosecution under this section, provided a company or a dealer did not keep records indicating that the reason for the denial of a sale was that an intended purchaser had refused to resell or to offer to resell at a price not less than a minimum specified by the dealer or established by agreement. If all a dealer does is notify an intended purchaser that on and after a certain date he is on a quota; if he says "We feel that we have sufficient sales elsewhere, and do not have to deal with you. We appreciate the value of your patronage and respectfully decline it", I say there is no court in the country that would convict a dealer in the face of those circumstances. That would be

Combines Investigation Act the condition unless, as suggested by the hon. member for Iles-de-la-Madeleine, the dealer were foolish enough to give reasons either in the letter he might write, or in a memorandum, or in a conversation between his agents and the intended purchaser.
This has all the earmarks of being ineffective. With the greatest respect to those to whom the hon. member has made reference I say that, on the face of it, as the section now stands it will be ineffectual and inoperative; because these people of whom the Minister of Justice speaks with such awe, corporations with powerful counsel, are not going to have their records cluttered up with admissions of guilt or anything in the nature of statements that would come within the provisions of the section in question.
The situation is different under the Combines Investigation Act as a whole. The hon. member for Charlotte mentioned that a combination is sufficient. But the Minister of Justice quickly clarified that suggestion by stating that a combination, in itself, is no offence. Any number of manufacturers or distributors can combine or join together for the purpose of merchandising, so long as they have not the intent, or so long as their actions are not detrimental to the consumer. That was not very difficult to prove-although the Minister of Justice has said that it was-as compared with proving or establishing an offence under this new section. There is a vast gulf in between. One is comparatively easy. But I have read and reread the section, and I suggest that the difficulty the crown will have in discharging its onus by bringing a case within the provisions of subsections 3 (a) and (b), in their present form, is insurmountable so far as the prosecution is concerned. That would be so except in the isolated case where the smaller fellow, without legal talent available to him, may not cover himself. But any group of individuals desiring to evade this amendment and avoid its consequences, in so far as goods for future delivery are concerned, I submit will have very little to fear.
Having said that, I leave it to the minister to either make it effectual or leave it in its present form, as I know he will. But I am confident that when the first prosecution occurs some of my criticism will be justified by what takes place in the court; because it is obvious on the face of it that under the section as drafted the crown has piled upon itself an onus the discharge of which is almost impossible.


Charles-Arthur Dumoulin Cannon: I suggest the difficulty of
proof will not be as great as has been suggested, because one will be able to proceed by a process of elimination. We will suppose that manufacturer A has been supplying retailer B over a certain period of years, and that suddenly he refuses to supply the retailer any longer. Retailer B is your witness, and counsel will ask him: "Have you been paying regularly? Have you behaved as a retailer should behave toward his supplier?" It will be relatively easy, by a process of elimination, to establish that the only reason the manufacturer has refused to supply goods is the one foreseen by this measure.
One should not forget that in a prosecution of this kind the retailer can be called as a witness. One does not have to rely upon the evidence from the manufacturer. The hon. member for Lake Centre has referred to the difficulty of getting evidence from the manufacturer's records, but I suggest to him that a prosecutor would not have to rely upon that; because in a case like that, if you are going to prosecute it will be because the manufacturer has refused to supply the retailer. The retailer will not be very happy about it and will gladly cooperate with the department. I do not see any great difficulty in the section.


Edmund Davie Fulton: The minister has been referring to the matter of enforcement. How would it apply to dealers who in fact purchase and pay for goods they are to resell, although they are called commission agents? I understand that the enforcement of this measure with respect to a retailer depends largely upon whether he is in fact an independent retailer or dealer, or whether he is an agent in the true sense of the term. What about the man who takes a commission agency, but in fact has to pay for the goods as he receives them, or on a monthly basis? How will the measure apply? He has paid for the goods, although he is described as the agent of the manufacturer.


Stuart Sinclair Garson: 
Edmund Davie Fulton: I may have used the wrong expression. I think I used the word "commission", but I meant to say that it would be on consignment.


Stuart Sinclair Garson: If the goods are on consignment, then I believe the title would remain in the manufacturer until the sale had actually taken place. And it might be that under an arrangement of that sort the conditions to be imposed would not contravene the act. But if my hon. friend will recall the answer I gave previously he will know they all related to a case where there was a transfer of title from the manufacturer to the dealer, who became the owner of the goods. When he became the owner of the goods he had the right to say what the selling price of the goods belonging to him would be. If the title remains in the manufacturer until the time it passes to the consumer, I think in that case the manufacturer would have the right to name his own selling price.


Edmund Davie Fulton: Would that cover service station operators and motorcar dealers?


Stuart Sinclair Garson: My understanding, and I may be wrong about it, is that a great many filling stations are owned and operated by the oil companies, by employees under the direction of the oil companies.


Edmund Davie Fulton: There may be some, but I am thinking of the genuine dealer who owns his own establishment, who sells a certain brand of motor oil and gas at prices fixed by the oil company. It is his business; it is his property; he owns it, but with respect to the gas and oil he sells at prices fixed by the supplier.


Stuart Sinclair Garson: I think my hon. friend will agree that even in those cases where the oil company is not operating the filling station but where they have a lessee who gets a quantity of oil and gas from the oil company, title to which remains in the oil company until it is sold-


John George Diefenbaker: No.


George Harris Hees: He pays for it.


Stuart Sinclair Garson: It depends upon whether the manufacturer is selling his own goods direct to the purchaser or whether there is the intervention of another dealer who becomes the owner of those goods.


Edmund Davie Fulton: I should like to deal with the specific basis on which these dealers operate. They own their own business and are supplied by an oil company with a certain line of oil and gas which they have to sell at a certain price. They are not acting as agents of the oil company. They pay for their supplies as
Combines Investigation Act they are received, or in some cases on a weekly basis, or in exceptional cases I believe on a monthly basis. They do not act as agents because they have to pay for their supplies. Although they are described in some cases as being agents of the oil company, would such persons be subject to the provisions of this bill?


Stuart Sinclair Garson: If the dealer purchases the goods outright and then sells them he would come under the amendment, but not so if title to the goods remained in the manufacturer up to the time of the sale to the purchaser.


George Alexander Drew: I think there is one aspect of this discussion that perhaps has not been sufficiently emphasized. The government is putting this measure forward with great determination. It is the obligation of the government, first, to know what the effect of this legislation is going to be and, second, to pass on to the members of this house information which the government possesses so the decision may be made with all the essential knowledge in the possession of the government.
It is the duty of members of this house to inform themselves adequately as to the effect of an amendment of this kind. I submit that the question which has been raised goes directly to the root of the problem we have before us. I ask the minister to tell us what is the exact situation in regard to the handling of oil and gasoline. After all, before bringing this bill forward he must have examined each of the great broad groups of merchandising and found out how they operated. I know he would not introduce this bill without having thoroughly considered every aspect. I think he should tell us now just how oil and gasoline is handled and what the impact of this amendment will be. We will then pass on to some other type of merchandise.


Stuart Sinclair Garson: I do not think the most omniscient of governments could be expected to know all the operations and all the arrangements which oil companies may have with their dealers. I think most hon. members out of their common knowledge will bear me out when I say there are a number of cases in which oil companies operate filling stations with their own paid employees who are under their direction. The title of the goods remains with the manufacturer until they are sold direct to the motorist. That group would not fall within the terms of the amendment.
There is another larger group where the oil company has an arrangement with lessees of filling stations owned by it, under which the lessees are required to maintain the
2474	HOUSE OF
Combines Investigation Act premises. The oil company agrees to supply the lessee from time to time with oil and gasoline as required, which he in turn sells to his customers. Regardless of what name we may give to that transaction, if the lessee, the filling station operator, or whatever appellation you wish to apply to him buys the oil and gasoline from the oil company direct, pays for it and resells it to the motorist, that transaction would come within the present amendment.
I do not know that I can make it any clearer. I am willing to continue to try to meet the quite reasonable requests of the leader of the opposition, but I think that pretty well covers the field.


Edmund Davie Fulton: Will not the result of this amendment be to drive manufacturers and retailers into a principal and agent relationship, which would not be subject to the provisions of this bill? In order to preserve his competitive position as against his opponents, the powerful retail chains, departmental stores and so on, will independent retailers not tend somehow or other to give their transactions with their suppliers the colour of a principal and agent relationship rather than that of an independent retailer buying from a manufacturer? Surely that will be the effect of this legislation.


Stuart Sinclair Garson: I do not pretend to answer that question with any particular competence because it has to do with the motor trade and I am not an expert in that field.


Edmund Davie Fulton: Any type of trade.


Stuart Sinclair Garson: Let us talk about one trade at a time. My answer to my hon. friend's question, for what it may be worth, is no, I do not think so. My impression is that the retailing of oil and gasoline is a pretty competitive business. With conditions as they are at the present time it is rather unlikely that any filling station operator would attempt to reduce the price of his merchandise in order to keep going.


Gordon Graydon: The avenue is open.


Stuart Sinclair Garson: If there is competition in the field at all it would seem to me to more likely be by companies like the Joy Oil Company, which has introduced some element of competition at the manufacturing level.


Edmund Davie Fulton: The minister has just said that this particular field is pretty competitive, with which I agree, although it is subject to resale price maintenance, as he has just said. In the case of the independent dealers I would say the majority buy their gas, pay for it and then resell it. The minister admits it is a pretty competitive business. However, he has said it is going to be subject


to the bill. I cannot see how he can reconcile his two statements and say that the object of the bill is to increase competition when he says on the other hand that this particular business, which is subject to resale price maintenance, is pretty highly competitive.


Stuart Sinclair Garson: I do not think I said it was
subject to resale price maintenance.


Edmund Davie Fulton: The minister did not say
that in so many words but in fact it is.


Stuart Sinclair Garson: It is all very well for the
hon. member to say that, but do not imply that I have said it.


Edmund Davie Fulton: Is the minister saying that it
is not?


Stuart Sinclair Garson: No, I am not saying it is or
it is not because it has not been necessary for us to inform ourselves on that point.


George Alexander Drew: I think the answer the minister has just given is simply further proof that every effort that has been made to obtain reconsideration of the bill has been more than amply justified. We are dealing now with the effect of a specific section of the bill. Previously we were dealing with the broad question of whether a bill in this form should be adopted. Now we are dealing with the specific section and its effect upon the retailing of merchandise and commodities of various kinds. They divide themselves into many fields, and we are dealing with one very important field. In view of the fact that we as members of the House of Commons are asked to support a measure which is going to define as a criminal offence agreements to carry forward certain practices that have been going on for some time, I feel sure the minister would not come before the house and ask us to adopt a bill in this form without having had an inquiry made into the impact upon every one of the major groups of retail sales in this country.
Certainly one of the important groups that would immediately present itself to anyone would be the merchandising of gasoline and oil. Therefore it is not for the minister to say: I do not pose as an expert;
I do not say it will have this effect and I do not say it will not have this effect. I think it is for the minister to say to us that certainly they have examined the impact of the bill in this form on the merchandising arrangements of the country. When he is asked what the effect is in regard to gasoline or oil he should be able to say: This is what we have found it will be. If he is asked what the effect will be with respect to another type of merchandising he should be

able to say: I will tell you that. It is in relation to this very important type of merchandising that these questions are being asked. Either the minister knows what the broad division of this type of merchandising is or he does not. If he does, then he should inform us. If he does not, then at this point he should admit he has not the information upon which he should proceed at this time.


Mr. Hosking:: Probably if the opposition
would take a case that was not hypothetical but practical the minister would be able to give a concrete answer. The position with respect to service stations is that if you own your service station generally one of the oil companies will offer to instal the equipment if you will sell their product. Once you have agreed to do so, then if you are in a position where they will accept your credit they will fill your gasoline storage tank and you may pay them by cheque. If your credit is not so good you will order so many gallons of gasoline, submit a cheque and when it is cashed they will then put the gasoline in the tank. As the minister has said, in a general way, if the service station owner buys and pays for the gasoline he can sell it for whatever price he wishes.
I think his answer was absolutely satisfactory to anyone who understands the trade. I should like to point out further to hon. members of the house who have witnessed gasoline price wars-and I think most hon. members have had some experience on this subject-that surely no one would think that when gas price wars have taken place the brunt has been borne by the lessee or owner of the service station. His profit is far too small, even if he worked for nothing, for him to take part in the gas wars that we have seen take place. They are carried on by the companies. I have never seen any price fixing in this trade. I think it is most unfair to ask the minister to build up an answer to a mythical case, to have an answer prepared for a case that does not exist.


William Joseph Browne: I should
like to give a practical case. In the city of St. John's, where there are about 60,000 people, there is an agency for Studebaker, one for Ford, one for Chevrolet, one for Pontiac and so on for other cars. There are several hundred parts in a motorcar. What is to prevent a dealer charging a higher price in the future than he has been charging up to now under catalogue prices?


Stuart Sinclair Garson: He would be prevented by
the amendment which provides that the manufacturer, if he wishes, may fix a maximum price for his product and may enforce
Combines Investigation Act that maximum price. Therefore if a dealer in St. John's were trying to charge the public more than the present suggested price the manufacturer would only have to fix a maximum price and he could prevent that.


William Joseph Browne: But if he
does not fix it?


Stuart Sinclair Garson: If he does not fix it then he must concur in whatever happens.


Edmund Davie Fulton: I should like to follow up the motion we were discussing a few moments ago. I was dealing with the oil business, but let us leave that and turn to the electrical appliance manufacturing field. I understand from what the minister has said that if the retailer buys and pays for the goods himself and then resells them, that transaction, as between him and the manufacturer, would be subject to the bill now before us. If he is an agent of the manufacturer then the transaction between them would not be subject to the bill. To repeat my question, does the minister not believe that if these retailers and manufacturers are interested in preserving their competitive position as against more powerful business concerns the tendency will be for the retailer to take on the colour of an agent so he can continue to get the benefit of resale price maintenance which he feels is the protection he needs against unfair competitive practices of large concerns?


Stuart Sinclair Garson: Again my answer is no; and again, notwithstanding what the leader of the opposition has said, I cannot honestly claim for myself any great competence in the field of merchandising of electrical appliances. The reason I say no is that when the bill comes into effect I think there is going to be in the electrical appliance field, as indeed there is now in respect of importations from the United States, a competitive area. Therefore the manufacturer who wishes to set up these agency arrangements will have to face this other competition. He may now have a very fine price-maintenance agreement with his own people but with a substantial part of the whole area open to this competition he is going to have to face it and, as was seen during the depression when resale price maintenance was in effect, if conditions get tough enough resale price maintenance will not stand up under it.


Edmund Davie Fulton: I should like to make the observation that resale price maintenance was certainly not in effect in the depression in the same way it is today. I should like to put before the minister the other alternative and ask whether he does not think

Combines Investigation Act the situation may develop that even if retailers do not willingly become agents of manufacturers, yet manufacturers will be forced into the retail field, which would have the same effect of lessening competition rather than increasing it?
In that connection I want to lay before him the evidence given on this very point in the committee by the witness from the Canadian Manufacturers Association, as reported at page 575 of the proceedings. He was being questioned by Mr. Fleming:
Q. My last point is in regard to your statement that the abolition of resale price maintenance will force manufacturers into the retail business. Can you be more specific about that so we can estimate the degree of danger or the extent to which that might become a practice on the part of manufacturers?
A. Mr. Fleming, you are asking me to deal with a situation we have never had to face. As I see it, we would have to adopt the merchandising tactics of, for instance, the Singer Sewing Machine Company, in that we would open our own stores in various places. If you decided to buy a McClary refrigerator you would go to one of those stores, owned and operated by us. We could not possibly provide as many stores as now sell McClary refrigerators but we would try to provide enough to give us a satisfactory volume of business.
Q. What would be the effect on prices, eventually, to the consumer?
A. Well, sir, unless we proved to be more efficient retailers than the retailers in business now, the price would not be any lower. I, myself, have had a long and assorted business experience and I am a little inclined to think that there are very few people who have a talent for manufacturing and who have a talent for retailing also.
Q. Well, in short-[DOT]
A. I am sure that we would not be any more efficient than the average good retailer today-and consequently we could not sell at any lower price.
The minister has been saying that if the relationship of the supplier and the dealer is maintained, then! the transaction will come under the effect of this bill and price maintenance will not be allowed to continue. What I am putting before the minister is that we have had evidence to the effect that the desire of the retailers for the protection of price maintenance is such that when they find that as dealers they are deprived of it as a result of this bill but can get it as agents, they will become agents of the manufacturers instead of dealers. Furthermore, if that process does not take place, then the manufacturers themselves will go into the retail business. There we have the evidence of a manufacturer who says he does not think they would be efficient retailers, but nevertheless they might have to undergo that process. If this bill is enforced, according to this witness it will not increase competition but will really substantially reduce it.


Stuart Sinclair Garson: When my hon. friend started on his question my mind instantly went to the evidence that was given before the committee and I wondered where I could put my

hands on the quotation which would prove that my hon. friend is wrong in his contention. Then the hon. member proceeded to read it to the members of the house. The question which faces the manufacturer in the circumstances to which my hon. friend alludes is this. Can I receive my manufacturer's sale price and get my manufacturer's profit better by selling the article to people who are experienced in the trade or by becoming a retailer myself? If he thinks he can get it better by becoming a retailer himself, for whatever reason, whether it is connected with resale price maintenance or something else, he will go into the retail trade himself. But this witness indicated how he felt, and I read his answer:
-unless we proved to be more efficient retailers than the retailers in business now, the price would not be any lower. I, myself, have had a long and assorted business experience and I am a little inclined to think that there are very few people who have a talent for manufacturing and who have a talent for retailing also.
So there is the answer-


Donald Methuen Fleming: Will the minister just read the next two or three questions?


Stuart Sinclair Garson: Yes.
Q. Well, in short-
A. I am sure that we would not be any more efficient than the average good retailer today-and consequently we could not sell at any lower price.


The Chairman:: Your last question, Mr. Fleming.
By Mr. Fleming:
Q. Is size a badge of efficiency in retailing?
A. No, sir. Size is not a badge of efficiency in any line.
Q. The question put to you this morning was as between the large efficient retailer on the one hand and the smaller inefficient retailer on the other hand, and I take it you are not prepared to say that is a correct reflection of existing circumstances?
A. No, sir, it is an incorrect conception.
Is that enough?


Donald Methuen Fleming: Yes.


Stuart Sinclair Garson: I do not think that makes any change, if I may say so. The hon. member asked me, will they do that? I say I do not think so, because once that amendment comes into effect and 'there is competition at the retail level it is reasonable to assume that any substantial mark-ups which now prevail will be narrowed to some extent by that competition. If the manufacturer does not think he can get into the retail business at a profit with the present mark-up he will not do it for less.


Edmund Davie Fulton: The whole situation must be read in the light of the witness's earlier answer, which I read. His earlier answer was that, notwithstanding the difficulty, if resale price maintenance is abolished he thinks there is danger that manufacturers may be forced into the retail business. The minister

appears to have overlooked that answer, so I shall read it again. He read only those parts of the answer which supported his own argument, but the whole answer does not support his argument for the very good reason that the whole answer was subject to the earlier question and answer.


Stuart Sinclair Garson: May I ask the hon. member this question. If the manufacturer says he cannot see any profit in retailing, why would he worry about getting into the retail business at all as long as he gets his manufacturer's selling price? That is his business. Why should he worry about retailing at all?


Edmund Davie Fulton: Because the point that was being made in the committee was that if resale price maintenance is abolished there is danger that many retailers will find they are not able to stay in business. They will be driven to the wall by the large concerns, and will not be able to take the manufacturer's goods at all. The manufacturer, in self-protection, will be forced into the retail business. This point was made over and over again in the committee, and I am sorry it did not register with the minister. The manufacturers, to protect themselves against the big department stores who want to be the sole outlets for these lines, would have to set up their own retail stores because they do not want-any more than the small merchant wants-to be at the mercy of the big giants in the retail field. They want the little retailer kept in the field. It is in the interests of the consuming public also to see the little retailer kept in business.
The point made by this witness is that if resale price maintenance is abolished the protection the little merchant has will be abolished and he will be driven to the wall, and the manufacturer will be in the position of finding retail outlets only through these giant stores. In self-protection the manufacturers will then be driven to setting up their own retail outlets. It was in the light of the earlier answer of the witness that he felt they may be forced to do that, that he made his later answer. And he was then asked: Supposing you did have to go into the retail field and set up your retail stores, what would be the effect on price? The witness said: We are not as efficient at retailing as the retailers now in the business, so the price would not come down.
The important part of this witness's evidence, which the minister overlooked, was to the effect that if resale price maintenance is removed the manufacturers may be driven into providing their own retail outlets rather than get into the hands of these giants who would now dominate the field.
Combines Investigation Act


Major James William Coldwell: I should like to say a word. The hon. member for Lake Centre made a suggestion which I think is worthy of consideration. He pointed to the fact that the clauses as now drafted are restrictive in their nature and that nothing in the present bill would entitle a retailer, whether it be a co-operative society or an individual, to get supplies from a manufacturer. He suggested that there should be a subclause to the effect that no dealer shall refuse to sell or supply an article or commodity without justification. It seems that would cover the whole field. I think it strengthens the suggestion we have tried to put before the house all during this debate, namely that there should be some public board to which the retailer, the manufacturer or the consumer could apply if he felt that he was not getting the kind of deal he should get from a manufacturer. If there is difficulty about the phrase "without justification", as there might be, the board, having considered the application and whether or not there was justification, would make a decision and that decision might be appealed to a court of law. In that way we would be getting nearer what would be just to all those interested in measures of this kind.
What I am afraid of-and the more I hear of the discussion the more fear I have-is that as the section is now drafted it is not sufficiently comprehensive, and that it does not do what many of us would like to see done under this kind of legislation, namely give everyone as just a deal as possible and enable retailers, co-operative societies and so on to get goods they could resell without having to maintain the price laid down by the manufacturer. The evil we are trying to cure, and I know it is an evil, is that there is price control on the part of private individuals, namely manufacturers. That idea is abhorrent to all of us. On the other hand I think we must be careful that we give to all those interested in merchandising-the consumer, the manufacturer and the retailer- the opportunity of competing for the business that exists, and give the consumer a squarer deal than he is getting at the present time.


Stuart Sinclair Garson: I must confess, Mr. Chairman, that I would not have been disposed to go into any detailed discussion of the suggestion that was made by the hon. member for Lake Centre if it had not made such a great impression upon the mind of the leader of the C.C.F. party for whose judgment I have a great deal of respect.


Major James William Coldwell: I am not a lawyer.


Stuart Sinclair Garson: I suggest, however, in all seriousness that if we are going to have any

Combines Investigation Act regard for civil liberties, about which the hon. member for Lake Centre is always so solicitous, of the individual citizen, then in creating a new crime we must set some kind of a definition or some kind of criterion of improper conduct. If we merely say, as he suggested, that no dealer shall refuse to sell or supply an article or commodity to any other person without justification, period, what kind of a prosecution would that be, if I may ask? You lay the charge and it comes before the judge and you say: "Well, he did this without justification". "All right", the court will say, "what is justification? What is proper justification?" Surely the hcxn. member for Lake Centre was not serious when he made that suggestion in the first place. If he says this bill is in bad shape as it is now worded, I would say it would be much worse if this suggestion of his were accepted, because there would be no kind of adequate standard in the creation of a new crime if you merely added the words "without justification". What would justification be? Could any person tell us? There would be no kind of objective act, thought or thing in relation to which justification, as defined as such in the section, could be applied. When we are amending the Combines Investigation Act for the purpose of abolishing resale price maintenance, if we are going to be halfway fair to the subject at all and are going to protect his civil liberties, what we must do is define in definite terms the crime we are committing or rather creating and with which we are proposing to charge him before the law.


Donald Methuen Fleming: "The crime" you "are committing" is right.


Stuart Sinclair Garson: My hon. friend says there would be great difficulty about enforcing this legislation. Let us just look at it for a moment. If it had not been for the impression made upon the hon. member for Rosetown-Biggar by the suggestion of the hon. member for Lake Centre-


John George Diefenbaker: I would not expect it would make any impression on the Minister of Justice.


Stuart Sinclair Garson: Let my hon. friend not waggle his hands and get excited about the matter.


John George Diefenbaker: All right. It does not require any of these smart aleck remarks.


Stuart Sinclair Garson: My hon. friend says it would be difficult to enforce this legislation. I wonder if he has looked at subsection 2 of section 37A, which reads as follows:
No dealer shall directly or indirectly by agreement, threat, promise or any other means whatsoever, require or induce or attempt to require or induce any other person to resell an article or commodity . . .


I will not list the other provisions. If the dealer does so, it will be in breach of the act. That means that when this implement firm goes out in the spring to make arrangements with its dealers, it cannot enter into an arrangement directly or indirectly, or by any other means whatever, under which there is any implication or understanding that a resale price is to be maintained on its products. That is what it says to start with. If they do that, a charge can be laid under that section.
Suppose the gentleman who is their dealer has obtained a list of the goods on which they have suggested what the resale price shall be, and suppose he sells them for less than the suggested* mark-up. This would not take place in a vacuum by itself-from a common sense point of view what would most likely happen is this. If the dealer was a reasonably good man and did it once, they would probably have their block man go around and have a little chat with him about prices. If he did it again they might have another chat. They would not immediately chop off the man who had been a good dealer for them for many years. The time would come, however, when if this little friendly coercion, that had been applied did not produce any acceptable response, then they would refuse to supply him with any more goods. Then the dealer would come in to the combines investigation branch and make a complaint and we would investigate it.
My hon. friend says there would be great difficulty as compared with the administration of the Combines Investigation Act. In the case of the Combines Investigation Act we have to go out and get 100 per cent of our evidence from witnesses who are unwilling, from beginning to end, to have anything to do with our investigation. In the case of a prosecution under this amendment the retailer himself is a willing and able witness to assist the crown. He will say that on such and such a date the block man or the salesman spoke to him, and that he spoke with him at another time and then, two or three weeks afterward, his supplies were refused. He will say: It is true they have not said that they have refused supplies for that reason, but I have every reason to believe that is the case.
Notwithstanding what has been said by my hon. friend, who is a lawyer with great experience in criminal law, this is a pure question of fact, as I think he will admit. Under those circumstances if we put the dealer into the witness box, proved what had happened and subpoenaed the block man or the salesman, if the accused corporation was

unable to give any other reasonable explanation as to why suddenly, after some lengthy period of experience, they had refused to give any further supplies, I should think there would not be too much difficulty in getting the judge to hold, under the circumstances, that an offence had been proved under this act. In any event I am perfectly certain that the suggestion which my hon. friend from Lake Centre has made is no improvement.


John George Diefenbaker: Mr. Chairman, what I said was that I was not in any way drafting a section. I said there would have to be something along the line of the words "without justification" and I did not particularize. It was obvious that I was in no way endeavouring to draft the section, but I was suggesting that something along that line might have been effective. When my hon. friend speaks of civil liberties and their protection, and concludes his remarks by saying "after we have placed a few suspicious circumstances before the court" and then goes on to say that if the accused was unable to give any other explanation he was sure the court would convict, all I have to say to that is that it is the best exposition of the denial of civil liberties that has ever been given on the floor of this house, because it would be placing the onus upon the accused to disprove something that the crown had failed to prove.


Stuart Sinclair Garson: I should like to ask my hon. friend what the incorporation of the words "without justification" would do if it would not do that very thing?


John George Diefenbaker: That is exactly the point.


Stuart Sinclair Garson: Certainly, it is the point.


John George Diefenbaker: I merely suggested that, by setting out in detail the offences, the onus on the crown was such that it could not be discharged, and that something along the lines of "without justification" would be "without legal justification" and anything in the nature of an offence against section 37A, subsections 1 and 2, would be without legal justification. I am not going to propose the thing; I am not here to try to make a section operative, but I am pointing out what needs to be pointed out in this committee, namely that what is being done is a sham designed to deceive the Canadian people into believing that the cost of living is going to be materially reduced, when in point of fact, on the face of it, this legislation will not have that result in the long run.
If the government had intended to act they would have done something about loss leaders, but they would not do that; it would
Combines Investigation Act hurt their great friends. That is the reason they did not act. As a matter of fact they could not draft an amendment regarding loss leaders. Well, an amendment has been drafted in the United States and is before the House of Representatives at the present time. The reason the government, with its overwhelming majority in the committee, refused to allow the amendment of the hon. member for Spadina was that they were afraid they might hurt their great and powerful friends.


Stuart Sinclair Garson: My hon. friend knows he is not telling the truth when he says that.


John George Diefenbaker: Mr. Chairman, I have
never asked for a withdrawal in this house. I will not ask for a withdrawal now, but I commend my hon. friend to these lines of Shakespeare:
But man, proud man,
Drest in a little brief authority,
Most ignorant of what he's most assur'd.
That is my answer to my hon. friend. Whether I am truthful or not in this house I will not allow my hon. friend to determine. And if he is big enough he will get up and say; We say things heatedly in debate. I will not ask him to withdraw; I will give him an opportunity to do so.


Stuart Sinclair Garson: Well, Mr. Chairman, when
my hon. friend withdraws the wholly unwarranted imputation which he made against the government I will be very glad to withdraw what I have said.


John George Diefenbaker: That is not-


Stuart Sinclair Garson: Will my hon. friend withdraw? Let us make-


John George Diefenbaker: I do not withdraw; I
reassert it. I am speaking about the government in debate and my hon. friend is speaking about an individual, and he has no right to say what he said. Apparently, however, that type of debate passes in the legislature of Manitoba. All I have to say is this. I make the statement again that the attitude of the government toward their great allies, the powerful merchants, as opposed to the small merchants of this country, is indicative of the reason why the action against loss leaders asked for by the hon. member for Spadina was denied not only in the committee but also by the government itself.


Stuart Sinclair Garson: My hon. friend is placing some remarks upon Hansard which will no doubt make their appearance in due course in many outlying parts of Canada, and we cannot blame him for that if he thinks this sort of tactic will do him good.

Combines Investigation Act


John George Diefenbaker: All I have to say to the hon. gentleman is that he should withdraw any suggestion of untruthfulness, not the conclusion. I want to emphasize that. He can criticize the conclusions of any hon. gentleman. I will leave it there.


Edmund Davie Fulton: On the point which appears to give the minister such concern, namely who is going to be helped most by this bill, and who is going to be hurt most, I would ask this question. It is a fact, I believe, from what he has said that the independent merchant who has to buy from the manufacturer will find his transaction brought under this bill. In other words, the small merchants will not be able to get the benefit of maintained prices. Let me ask him this. In the case of Eaton's, who do both manufacturing and retailing, will the bill operate to prevent them from selling the goods which they themselves manufacture through their own retail stores at whatever maintained prices they themselves wish to set?


Stuart Sinclair Garson: That question has already been answered. Goods which the manufacturer produces and sells himself, naturally he sells, as the owner of the goods, to the ultimate consumer; and he sells for the price determined by himself.


Edmund Davie Fulton: So the giant stores which do manufacturing as well as retailing will not be affected by the bill; whereas the little merchant will be affected. Is not that the case?


Stuart Sinclair Garson: I would point out to my hon. friend that there will be no change in that respect.


Edmund Davie Fulton: So that-


Stuart Sinclair Garson: My hon. friend asks the question. Will he keep quiet until I give him the answer, or shall I take my seat until he has finished talking and then get up and answer?


Edmund Davie Fulton: I am waiting for my answer.


Sarto Fournier: You
are not a waiter.


Stuart Sinclair Garson: In reply to my hon. friend's question may I say that the present amendment will not change in any respect the practice which prevails in that regard at the present time.


Edmund Davie Fulton: The minister has not answered my question. Is it not a fact that with respect to setting prices, this bill does not affect the giant stores which do their own manufacturing and retailing, but it does affect the little merchant who has to buy his goods from the manufacturer?


Stuart Sinclair Garson: The answer to my hon. friend -and he as a lawyer must know this-is that this bill is of general application, and it affects all firms in Canada equally that come within its provisions.


Edmund Davie Fulton: The minister still does not answer. Will he then answer this question. Is it correct to say that the giant stores which do their own manufacturing and retailing do not come within the provisions of the bill, but the little merchant who buys from outside sources does? I am waiting for the minister's answer. The minister has twice skated around the first question and is obviously unwilling to answer the second. His silence indicates he is stuck, so we will have to let the minister's refusal to answer speak for itself.


Donald Methuen Fleming: It is quite obvious from the answers we have received that the talk we have heard from the government about this bill being designed to stimulate competition is just so much idle nonsense, because it is perfectly apparent from what the minister himself has just admitted that the net effect of this bill is going to be to build up more monopolies and reduce effective competition. We, the official opposition, have been trying to tell the government that. We have tried to do so in the committee, and we have been trying also in the house. It is crystal clear now; the minister has just indicated it by his last remarks, and it is perfectly apparent what course business is likely to take in this country. The effect of this bill obviously is going to be a reduction in the number of independent retail outlets. That did not worry the Minister of Transport this morning. It has not worried the government at any time. It did not worry Mr. McGregor before the committee. No; anybody who cannot survive after this bill has passed can die, and apparently they think his death will be a useful contribution to society. That is the government's attitude. What do we find, Mr. Chairman? It is perfectly clear what is going to happen. The bill has not the slightest application to the case of the big manufacturer, or at least the big merchandiser, who is perfectly free to combine manufacturing, merchandising and retailing. But it will hit the little retailer; and obviously it will hit him so hard that a great many retailers will be forced out of business. And the government likes that. That is what they want. That is what they are out to create by this bill.


Mr. Ferrie:: Rubbish!


Donald Methuen Fleming: Let us strip all the pretence from this bill!


Gladstone Mansfield Ferrie: Stop acting.


Donald Methuen Fleming: Let us strip all the pretence from this bill! It is one which will deal damaging blows to free competition in this country. This bill, Mr. Chairman, will have the effect that we have been telling the house as best we could, namely that of playing into the hands of monopolies. I tell you this should be a separate bill and should be described by some such title as this: an act to build up monopolies in Canada; or perhaps it should be: an act to try to save the hide of the government in the face of inflation.


Gladstone Mansfield Ferrie: Nonsense.


Donald Methuen Fleming: Well, I am glad to hear this interruption, because it just illustrates the Hitlerian technique to which I referred this morning.


Gladstone Mansfield Ferrie: Shave your moustache.


Donald Methuen Fleming: The effect of this bill, so far as the so-called big interests in the manufacturing field are concerned, will be to help them, and there is not a member who does not know that by now, even though hon. members opposite are not prepared to open their ears. The big interests have been speaking. The big interests spoke while the committee was in session. Some of them went to the press with their statements. Members of the official opposition in the committee, seeking full information, asked that some of these big merchandising organizations be called before the committee to give evidence. We wanted to know what prompted them to support a measure of this kind. But oh, no; the government majority on the committee would not have them called. Why? Why did they not want some of these big departmental stores called before the committee to give evidence? I will tell you why they did not want that evidence brought out by examination in committee. The big interests have declared themselves to be on the side of the government. Does the government disown their support? There has not been a word uttered in the house or outside of it by any representative of the government disowning the support of this bill by the big interests.


Gladstone Mansfield Ferrie: In Toronto.


Donald Methuen Fleming: No, in any part of Canada. The hon. member who has interrupted me does not confine his support from the big interests to any part of Canada. Because the interests I am talking about are the big interests to be found operating in all parts of Canada.


Gladstone Mansfield Ferrie: In Toronto; that is what you are talking for.
Combines Investigation Act


Donald Methuen Fleming: And the effect of the bill is perfectly clear, because the big merchandising interests have made it clear that they like this bill. The hon. member who has interrupted is quite happy to be in the company of the big interests who say they like this kind of legislation,


Gladstone Mansfield Ferrie: We are not fighting for them. You are.


Donald Methuen Fleming: The big interests in this country, so far as this bill is concerned, are on the side of the government; and they have stayed there. And, so far as the small interests are concerned, let me say that those who spoke before the committee said they did not want this legislation. They said it was bad for the retailer.


Stuart Sinclair Garson: On a point of order, would the hon. member-


The Acting Chairman (Mr. Jutras):: I would remind the committee that the hon. member for Eglinton has the floor, and I think we would make better progress if he were permitted to complete his argument.


Donald Methuen Fleming: I had indicated, first of all, where the big interests stand on this bill. They told us several times. And I was in the process of indicating that the small retailer in this country, the backbone of so many communities throughout the length and breadth of Canada, is against the bill.
Now let me ask hon. members:	In the
face of that, how dare the government maintain this pretence that the bill is going to hurt any of their friends in big business? The Liberal party and this government have made such a tight alliance on this bill with the so-called big interests in merchandising today that never again will any honest person be able to talk about big interests in terms of any political association other than with this government.


Gladstone Mansfield Ferrie: What about the match inquiry?


Some hon. Members:: Carried.


George Alexander Drew: No. I will return to the subject I was discussing, and in regard to which I received some useful information from the hon. member for Wellington South. I believe it is important that hon. members should know exactly what the facts are when they are being asked to pass a bill of this kind.
We had reached the point where the hon. member for Wellington South gave the minister some information, and said that in connection with gasoline and oil the companies deliver to the retailer, whether it be a garage or an ordinary filling station. He pointed out that in many cases the equipment is supplied
2482	HOUSE OF
Combines Investigation Act by the oil company, but that the oil or gasoline is then sold to the retailer. As he pointed out, if the retailer's credit is good he gets the oil; if it is not good, he hands over his cheque and the oil is delivered when the cheque is cleared. In other words in that last condition he made it clear that there is an outright sale of gasoline and oil to the man who operates a filling station.
I take his explanation, because he is in that business. If that is so, then the filling station operators are the owners of the gasoline and oil. Under this act, if it means anything, there can be no agreed price. That would be right, would it not, according to the minister? I see the minister nods his head in the affirmative.


Stuart Sinclair Garson: If my hon. friend wishes me to answer vocally I shall be glad to do so.


George Alexander Drew: Yes.


Stuart Sinclair Garson: I understood from what the hon. member for Wellington South said that the dealer paid for and became the owner of the gasoline and oil, and that it was not price-maintained at the present time. That being so, this amendment would not affect it at all, because it will continue not to be price-maintained.


George Alexander Drew: But, Mr. Chairman, I find it difficult to think that the minister has made no inquiry in regard to the handling of gasoline and oil. I find it difficult to believe that he has not, because he mentioned the Joy Oil Company, a name well known when one discusses the matter of agreed prices in the oil and gasoline business. I am simply seeking information as to the effect of it. I think it is generally understood that in regard to well-known brands of gasoline and oil- and we are talking about branded lines-there is not only a standard price for the same lines of gasoline and oil produced by a particular producer, but there is also a standard price for gasoline and oil of the same standard offered by different producers. If that is so, and I think I have stated it clearly, I assume it would come under the prohibition in the amendment before us.


Stuart Sinclair Garson: Well, I am just as anxious as I can be to accommodate my hon. friend in my answer. But I understood the hon. member accepted the statement of the hon. member for Wellington South, who is actually in the business afid who knows what he is talking about when he describes the situation. In relation to the set of facts he placed before the members I have just said, and I now repeat, that the present position is that that price is not maintained. Under the
[Mr. Drew.)

amendment, as the leader of the opposition correctly suggested, it would not be maintained either. If it were maintained it would be contrary to the amendment.


George Alexander Drew: I recognize that there must be a question of what the method is. I want to make it quite clear that, from what the minister and the hon. member for Wellington South have said, any attempt to settle agreed prices in the gasoline and oil business, according to the explanation given by the minister, would be in conflict with the amendment now before us.


Stuart Sinclair Garson: On the part of independent dealers who buy their own stocks.


George Alexander Drew: On the part of those who pay for their gasoline and oil in the manner described by the hon. member for Wellington South. Is that right? The minister indicates that that is correct. That being so, we now have a clear picture in regard to that particular business. I should like the minister to tell us if he has considered what the impact of these regulations will be upon the sale of photographic goods.


Stuart Sinclair Garson: It is hardly necessary to take a poll of all businesses. The answer to my hon. friend's question as applied1 to any industry in Canada is that where resale price maintenance is practised now it will be made illegal by the present amendment. In those cases where it is not practised or practised very little, the present amendment will have little effect. I take it from what the member for Wellington South said that the gas and oil business was one of the latter cases.


George Alexander Drew: I am assuming that when the minister presents this measure he does so with information in regard to its impact upon the various types of merchandising in this country. I point out that there are certain obvious types of merchandising about which we should have some information before we are asked either to support or even to discuss the advisability of details of this kind. Certainly one of the most clearly-defined types of merchandising on a large scale is that of photographic supplies. I think we should be told1 what is the general practice in that field and what impact the minister expects this amendment will have on that business.


Stuart Sinclair Garson: Members of the committee will recall that the committee had some difficulty in getting from witnesses who appeared before it an estimate of the area of any trade in Canada in respect of which resale price maintenance prevailed. That is natural because a great many of these resale price maintenance arrangements are not of the character

that are publicized to any great extent. The information we have in relation to the photographic supplies business is that there is a substantial degree of price maintenance. I would think that it is almost completely covered by price maintenance and therefore the impact of the amendment would be more extensive than on the grocery trade for example where there is hardly any resale price maintenance. I think that probably answers my hon. friend's question.


George Alexander Drew: Will the minister explain what the impact will be on the sale of books?


Stuart Sinclair Garson: I believe that there is a substantial measure of resale price maintenance there, but we have not attempted to form an; estimate of the percentage for reasons that I have already given. The witnesses who appeared before us and other competent authorities who have attempted to make estimates of the coverage of resale price maintenance in various industries have indicated that they could arrive only at an approximate figure. I have no reference to books in my list, but I believe there is a substantial degree of resale price maintenance in that field.


George Alexander Drew: If there is one type of merchandising in which the producer-the publisher in the case of books-advertises both nationally and internationally stated prices, it is in the case of books. In the consideration of this subject in Great Britain they made a most detailed analysis of the method of handling books and the way prices were dealt with. I would have thought there would have been a fairly comprehensive analysis made of that type of merchandising because after all the sale of books is something we do not want to interfere with unduly in view of the part they play in the development of the cultural life of the country. I do submit that we should have some information as to the anticipated impact of this amendment upon established practices in the handling of books in this country? Is the minister not able to add anything to what he has said?


Stuart Sinclair Garson: My hon. friend has referred, and quite correctly, to the fact that books are published- with a resale price indicated. However, it is one thing to make a price of that sort and another thing to carry resale price maintenance into full effect by policing and enforcing the suggested prices. If my hon. friend had gone into the matter at all I think he would find that all inquiries of this sort which have been made by bodies like the Lloyd Jacob committee and other such commissions have encountered considerable difficulty in establishing with any close accuracy the degree to which prices not only
Combines Investigation Act are named but are policed after being named in order to see that the retailer adheres to them.
I am sure that the leader of the opposition knows that in Canada many publishers suggest retail prices, and then when their books go into the trade they do not bother their heads about them. The great majority of buyers will adhere to those prices, but they do not bother about those who do not. In order to give my hon. friend an answer with any pretence of accuracy we would have to be in the position of being able to say what percentage of books were put out with prices suggested and what percentage of the prices were effectively policed. I doubt if there is a human being in Canada who knows that. I think it can be said that a substantial percentage are suggested, and I would think that there was a fairly substantial percentage where some attempt to enforce it was made.


George Alexander Drew: You mean by the publisher?


Stuart Sinclair Garson: By the publisher.


Gordon Graydon: What will be the effect of this proposed legislation upon producers or manufacturers in the United States who distribute their products in the normal course of business through retailers in Canada? What is the position with respect to this legislation in relation to that kind of business operation?


Stuart Sinclair Garson: With all deference to my hon. friend because he may know of some cases of that sort, is it not the usual practice for the United States manufacturer to have a Canadian agent who acts as his distributor for the whole of Canada, or perhaps a provincial agent in each of the provinces? This man looks after sales for him and makes shipments to the trade in Canada. In a case of that sort I think the Canadian representative of the United States manufacturer or the Canadian branch office of the United States manufacturer would come within the definition of "dealer" in subsection 1 of section 37A where it says that a dealer means a person engaged in the business of manufacturing or supplying or selling any article or commodity.


Gordon Graydon: I think we have to consider another point. I do not want to labour the matter but I have had it represented to me on more than one occasion since the legislation was proposed that there is a difficulty with respect to the relationship of United States manufacturers and producers with Canadian retailers. I think we have to consider the possibility that, while what the minister says now may be quite proper practice at the moment with respect to a Canadian general agent, business of course will regulate its affairs in such a way-and it is a normal and natural thing that they should do so-as

Combines Investigation Act to try to come within the law and at the same time carry on as far as they can the practices they have normally carried on in the past. That is a natural and normal thing for business to do. It is possible that in the future there may be a number of United States producers or manufacturers who will be dealing directly with retailers in Canada without the medium of a Canadian agent. In the minister's opinion are there any difficulties with respect to the enforcement of the act so far as United States manufacturers are concerned as opposed to Canadian manufacturers? I ask the question because I do not want to see Canadians, whether they may be consumers, retailers or manufacturers, dealt with in a discriminatory way compared with their American friends across the border. That is my sole reason for asking the question, and I would be glad if the minister would clarify it.


Stuart Sinclair Garson: Is not the practical answer to my friend that to begin with I should think the percentage of United States manufacturers who would sell directly to the retail trade in Canada would be very small?


Gordon Graydon: At the moment.


Stuart Sinclair Garson: At the moment. I should think that any advantages they might seek to get in the form of exemption from this legislation, if they could secure it, by dealing directly would not weigh very heavily in the balance against the advantages of being represented by a proper distributing agency in Canada. What would be the object of their dealing directly with retailers in Canada if it were not merely that in relation to the goods which they so sold they could get the Canadian retailer to maintain prices which he would not be maintaining in respect of goods he purchased from Canadian manufacturers. Having regard to the very small area of the total trade that would be covered by an arrangement of that sort, I should think that as a consequence of the competition which would be offered in the remaining area by the fact that there was freedom of trade between Canadian manufacturers and their retailers any advantage of having resale price maintenance between the United States manufacturer and the retailer would be absolutely negligible.


George Clyde Nowlan: I should like to direct the minister's attention to the position of producer marketing boards under the legislation that is proposed. I can think of several boards. We will take the one engaged in the sale of tomatoes over a relatively large area in the maritime provinces. That board fixes the prices at which the wholesaler will sell to the retailer. It has to do that because it also
LMr. Graydon.]
has to service trucks, which trucks are servicing outlying rural communities. It has a fear of competition from trucks coming into town and underselling the wholesaler. Therefore it enters into an agreement or at least it implies fairly clearly that you shall sell at a certain price or else it will refuse to deliver to you any longer. Rightly or wrongly, apparently that is thought to be a basis of orderly marketing. It is a practice which is sanctioned by provincial legislation, and I am not sure but what it is also affected by the dominion marketing act which approves of such provincial plans in certain circumstances. Would that practice come within the purview of the legislation now before us?


Stuart Sinclair Garson: I do not think my hon. friend said so, and if he did I did not catch it, but in all cases I think it is a practice which is authorized by provincial statute, is it not?


George Clyde Nowlan: That is right.


Stuart Sinclair Garson: Then it would not.


Gordon Knapman Fraser: There is one question I should like to ask the minister. There are three advertisements for drugs in one of tonight's papers to which I should like to refer. One says "Your cold stopped", and so on, and the price is given as 59 cents at all drug stores. Another one is supposed to stop telltale breath, and it is 25 cents. The third purports to expel something from the throat and is advertised as being 35 cents at all drug stores. Will firms who advertise in that way have to say in the future, "Not more than 35 cents at all drug stores", or are they allowed to put in the price?


Stuart Sinclair Garson: I want to be as co-operative as I can, but I think I can only repeat what I said previously. With respect to such advertisements that firms are running which is now legal they will continue to be legal after the passage of the amendment.


Gordon Knapman Fraser: Then they will be able to fix the price at 59 cents, 25 cents or 35 cents.


An hon. Member:: The suggested maximum price.


An hon. Member:: Fixed by the retailer.


Gordon Knapman Fraser: The manufacturer fixes it for the consumer.


Mr. Cardiff:: In other words, the bill is of no use.


Gordon Knapman Fraser: You are looking after the big interests.


Donald Methuen Fleming: I should like to turn to another aspect of the proposed section 37A. It is an aspect which seems to me to be of very great importance because it contemplates a complete departure from the principle of the

Combines Investigation Act. One would have thought that, as this measure is put forward as an amendment of the Combines Investigation Act, it would be designed to be in keeping with the principle of the act, but it is not in this very important respect.
Section 2 of the Combines Investigation Act is the one which contains important definitions. It defines a combine as a combination having certain described attributes or a merger, trust or monopoly. Then follow these very important words:
. . . which combination, merger, trust or monopoly, has operated or is likely to operate to the detriment or against the interest of the public, whether consumers, producers or others.
It is inherent in every provision of the Combines Investigation Act illegalizing combinations, mergers, trusts or monopolies that the prohibition or illegalization is not absolute. It is only partial or conditional. In other words, before any combination, merger, trust or monopoly is one within the meaning of the Combines Act it is necessary for the prosecution to establish that such combination, merger, trust or monopoly has operated or is likely to operate to the detriment or against the interests of the public, whether consumer, producer or others. That provision has been in the act ever since it was first enacted, and so far as I know that principle has never been questioned in this house.
If one is to look at Bill No. 36 in that light, one finds in if a complete departure from that principle. There is nothing in the proposed section 37A which imports that qualification into this provision. The proposed section 37A does not deal with combinations, mergers, trust or monopolies as defined in section 2 of the Combines Investigation Act. This proposed section takes up a new subject, and deals with it in terms of absolute prohibition. I submit to you, sir, that departure from the principle of the act is not sound.
I call to mind some of the evidence tendered before the committee on that very subject. When the representatives of the Trades and Labour Congress of Canada appeared before the committee-and may I say that theirs was one of the best and most intelligent presentations with which the committee was favoured-Mr. Bengough, the president, and Mr. Wismer, the director of public relations and research of that estimable organization, had something to say on this subject. I refer now to page 372 of -the proceedings of the committee where I asked some questions dealing with this particular matter:
Q. May I ask Mr. Wismer if he feels that this so-called practice of price maintenance is a detriment to or perhaps in harmony with public interest?
Combines Investigation Act
A. I think we can say this, in so far as the deal is made privately and enforced privately we would have to say no, but where it is a general practice I think we would have to have a lot more information.
Q. Have you examined the draft bill on page 34 of the proceedings of this committee?
A. I have read the original draft.
May I interject to say that the original draft was, to all intents and purposes, in the same form as Bill No. 36. There was no difference whatever in form, so far as the point I am discussing is concerned.
Q. You will recall it purports to propose blanket prohibition on resale prices. Would you think that is a proper and desirable way of going about this matter, that we have blanket prohibition, or if we are going to have legislation on it should it be left to determine whether in the particular case the particular type of agreement is in the given circumstances harmful to the public interest or not?


Mr.   Bengough@: It would have to be flexible.


Donald Methuen Fleming: You wouldn't favour a general
prohibition?


Mr.   Bengough@: No.
Mr. Bengough was not the only witness who appeared before the committee who entertained that opinion. At the moment I am not dealing with the other shortcomings of this legislation or with the failure to provide concomitant legislation to deal with the vicious practices I discussed earlier, such as loss-leadering. We are dealing here with the neat question as to whether this amendment of the Combines Investigation Act should be written in terms of a blanket prohibition, without regard to any necessity whatever of proof that the practice is harmful or detrimental to the public interest. In that respect the bill, as I have said, is a complete departure from the principle of the 'Combines Investigation Act.
It is no answer to say that in the course of judicial interpretation, if the combine has some of the attributes set forth in section 2, subsection 1 of the Combines Investigation Act, that will import, so far as the courts are concerned, that the combination is operating or is likely to operate to the detriment or against the interest of the public, whether consumers, producers or others. I submit that is no answer to the point we are dealing with here, where we have a section which is imported into the act, a section which does not deal with combinations, mergers, trusts or monopolies, but deals with a particular practice which we are told obtains today in certain lines of merchandising.
I submit that if there is anything to be said for legislation of this kind-I am not yielding anything of what I said about this bill-then certainly it can only be contemplated by the house on the basis that it should be within the principle of the main act. What objection could there be to carry-
2486	HOUSE OF
Combines Investigation Act ing into this proposed section 37A the principle of the Combines Investigation Act that measures dealt with under the act or frowned upon under the act are made illegal only where it is proven affirmatively by the crown that they operate or are likely to operate to the detriment or against the interests of the public? Surely this legislation could not be supported seriously by the government on any basis other than that the government was prepared to assume on behalf of the crown, in any prosecution under the proposed section 37A, the burden and duty of establishing that in that particular case the practice frowned upon was operating to the detriment of the public. I submit, therefore, there are no reasons against preserving the integrity of this essential principle of the Combines Investigation Act. There is no reason for departing from it. I contend that if this legislation is to be entertained by the house, it must be made subject to that essential principle of the act, and its present terms of blanket prohibition must be revised accordingly.


Stuart Sinclair Garson: Mr. Chairman, the short answer to the point my hon. friend has raised is that the Combines Investigation Act forbids combinations that are undue and against the interests of the public. What my hon. friend has overlooked, I suggest with deference, is that the courts have consistently declared that any substantial lessening of competition is undue and against the interests of the public. In the case of vertical resale price maintenance, the Mac-Quarrie committee came to the conclusion, and so recommended to the government, that having regard to the present growth of the practice, it does substantially eliminate competition and is therefore contrary to the public interest. On that account it is unnecessary to include this ingredient in the prohibition of resale price maintenance.


Donald Methuen Fleming: I submit that is a totally
unsatisfactory answer. When I spoke earlier I anticipated what the minister has just said. I said it was no answer for anyone to contend that by judicial interpretation these words had been construed as contemplating that where there had been a substantial interference with competition the courts would find that the combination, merger or monopoly, if one were found, was in fact detrimental to the interests of the public. That contention has not had the effect of wiping out these words in the act. These words are still part of the act. Nobody has proposed that these words should be eliminated from the act; yet the government now


proposes that an amendment be made to the act which will not be subject to these restrictive words.
The minister is not prepared, I gather, to have this amendment made subject to those words which qualify all the provisions of the Combines Investigation Act in relation to combinations, mergers, trusts and monopolies. Those words are still present in the act, but they will have no bearing whatever upon this proposed new section 37A. The minister says it is unnecessary. Do you not think, Mr. Chairman, that it would be a good thing if the crown, in a situation of this kind, were called upon to prove that the practice complained of was in fact detrimental to the public interest? If the minister is so confident that the practice is detrimental to the public interest, do you not think he would be quite prepared to submit to the burden of proving that fact to the court and having the court make a finding to that effect?
The minister's answer is no answer at all to the point I am raising. I suggest to the minister that, far from answering the point, what he has said on the contrary supports what I have said about the desirability of writing these words into this amendment. He apparently is satisfied that they do not do any harm in the act. Why should they not appear in the amendment?


Edmund Davie Fulton: On the point raised by my
hon. friend, I think the minister must admit that although the MacQuarrie committee may have come to the conclusion that because the practice of resale price maintenance interferes with their definition of competition it operates to the detriment of the public-


Some hon. Members:: Carried.


Edmund Davie Fulton: As I was saying, I think the
minister will admit that, although as he has stated, the MacQuarrie committee may have come to the conclusion that because the practice of resale price maintenance interferes with their definition of competition, it therefore operates to the detriment of the public-


John Sylvester Aloysius Sinnott: Who said that?


Edmund Davie Fulton: I understood the minister to
say that just a few moments ago.


James MacKerras Macdonnell: Two-job
John.


Edmund Davie Fulton: Does the hon. member think
I am incorrectly stating what the minister said?


John Sylvester Aloysius Sinnott: Who said that?


Donald Methuen Fleming: The minister.


Edmund Davie Fulton: I have told my hon. friend
that it was the minister. If he had been following the discussion I think he would have heard the minister say that just a few minutes ago.


Some hon. Members:: Carried.


Edmund Davie Fulton: I should like to continue to
address my remarks through you, Mr. Chairman, to the minister. I think the minister will also agree that this very practice of resale price maintenance has also been before the courts, and the courts have not held that it operates to the detriment of the public. As the minister knows, it is an accepted principle of our law that if a contract is in restraint of trade to an extent which is prejudicial to the public interest, the contract is not enforceable. In several cases, particularly in the recent Frosst case in Montreal, the courts have had such contracts before them and have not held them to be unenforceable as being against the interest of the public. The minister shakes his head. I know there is great disagreement as to what the Frosst case actually decided. In my view it proceeded on that basis, but in any event there were many other cases where these resale price maintenance agreements have been before the courts and have not been held to be against the public interest.
That being the case, I was not aware that the MacQuarrie committee had been set up as competent to make law or to set aside the findings of law of the courts of the land. If that is the case it is certainly an interpretation of the MacQuarrie committee's functions which was not placed before us. But to say what the minister has just said, and to make that the basis of his statement that it is not necessary to place in the act the words "detrimental to the public", does not in any sense deal with the point raised by the hon. member for Eglinton, who points out that it has always been part of our law with respect to combines that it should be necessary to prove damage to the public interest, and that since in the past the courts have not held those agreements to be detrimental to the public interest, then those same words should be in this present bill rather than a blanket prohibition without any justification in law for such a prohibition being assumed.


Joseph-Alfred Dion: Shall the clause carry?


Some hon. Members:: Carried.


Donald Methuen Fleming: No, Mr. Chairman. Has the minister not something to say on this matter?
Combines Investigation Act He read a statement on the subject which apparently had been prepared for him. Has he nothing to say? What we have heard from the minister briefly on this subject, Mr. Chairman, just illustrates further-if any further illustration were required-the utter folly of the government's actions. They appoint a committee to undertake a study of the whole operation of the Combines Investigation Act; then before the members of the committee have completed their review or made their report the government leap in and say: Come along; let us have an interim report on a particular subject; divorce that from the rest of your study; give us a report in a hurry. The committee makes a report on that particular subject; the government takes that report, manhandles it to suit its purposes, and brings in an amendment which departs from the essential principle of the Combines Investigation Act. If there is to be a departure from that principle which has a good deal of history behind it, I hope it will not be lightly done and that, in any event, it will be done only with full knowledge of its effect upon the operation of the entire act, not by any side-door method such as we are being invited to use here today.
Does the minister say that the principle of section 2 of the Combines Investigation Act is sound or unsound? If he says it is sound, then I invite him to tell us why this amendment should depart from that principle. If he says the principle of section 2 of the Combines Investigation Act is unsound, then let the government bring in an amendment, if they care to do so, to change the provisions of section 2 and manhandle the principle of the act, if they are prepared to do that.


Some hon. Members:: Carried.


Donald Methuen Fleming: No, Mr. Chairman. I invite the minister to say whether the principle is sound or unsound.


Some hon. Members:: Carried.


Joseph-Alfred Dion: Order.


James MacKerras Macdonnell: Mr. Chairman, before I speak on the point I wish to raise, I should like to ask this question. Are we to understand that a serious question asked by one of the members of this committee most competent to ask it is not going to be answered?


Andrew Wesley Stuart: That is your opinion.


James MacKerras Macdonnell: If that is so, I am going to suggest that this is something new. I would suggest that it is not only new as a matter of government technique but I would also suggest to the minister that it is not in accordance with the courtesy which I

Combines Investigation Act think he tries to maintain even when things are a little bit tense. Am I to understand that no answer is to be given to this question? If so, I will go on to speak on my own point.


Stuart Sinclair Garson: Mr. Chairman, I have answered this question-


An hon. Member:: Four times.


Stuart Sinclair Garson: -carefully-


An hon. Member:: Six times.


Stuart Sinclair Garson: -and accurately. I can go on and expand my answer for half an hour if you like and I can cite a number of cases and so on; but I would not add very much to the information I conveyed in the answer I gave just a moment ago.


Edmund Davie Fulton: Zero added to zero still equals zero.


Stuart Sinclair Garson: I do not want to be discourteous to any member of the committee but the fact of the matter is that the hon. member for Eglinton, in his research upon this subject, has gone carefully into the statute but apparently has ignored all the jurisprudence or all the decided cases on the statute. This matter turns upon that point. The detriment to the public which is referred to in this statute has been interpreted by the courts as meaning the prevention of competition; and resale price maintenance in itself is the prevention of competition.


Some hon. Members:: Carried.


James MacKerras Macdonnell: Hon. members had better stop that if they want to get away by next Saturday.


Mr. Langlois (Gaspe):: We can stay as long as you can.


James MacKerras Macdonnell: I meant a week from Saturday.


Donald Methuen Fleming: The minister's reply is not an answer; it is simply an assertion.


Joseph-Alfred Dion: Shall the clause carry?


Donald Methuen Fleming: The courts have not held that resale price maintenance is against the public interest. The minister is proposing now that parliament should legislate that to be the fact which the courts have not said to be the fact. I suggest that before parliament embarks upon that course it should take the proper safeguard of stipulating, as is done with respect to the entire operation of the Combines Investigation Act, that the burden should be discharged by the crown of proving that in the particular case the public interest has suffered. He says that where it is proven that competition is substantially lessened the courts will infer from that that the public
[Mr. Macdonnell (Greenwood) .1
interest has been detrimentally affected. But, sir, the element he treats as equivalent to a proof of something being detrimental to the public interest is not present with respect to resale price maintenance, because it has not been proven to have the effect of discouraging or limiting competition.
The government has tried to skate around what should be an essential element of proof, knowing that under the proposed section 37A they have to prove that there is an undue limitation of competition before the courts will infer that the alleged combination, merger, trust or monopoly is detrimental to the public interest. Why are they not prepared to do so here? Why do they introduce the entirely new principle of making a total, blanket, outright, absolute prohibition? I will give you a reason. The reason is that the government is not prepared to prove and does not believe it can prove that resale price maintenance is contrary to the public interest. They are not in a position to prove that it has the effect of limiting competition. They dare not go into a court of law on terms of reasonable equality with some accused and submit that issue to judicial decision. They would rather here, where they possess this big majority and use it so tyrannically, legislate in terms of these blanket prohibitions, these blanket condemnations, without submitting the crown to that burden of proof which has been found by long experience and by judicial decision-if the minister is interested in the jurisprudence on the subject of decided cases-to be so essential and wholesome in not only the administration of the Combines Investigation Act, but in all judicial determinations under the act.


Some hon. Members:: Carried.


Some hon. Members:: Filibuster.


Mr. Casselman:: Where have you been all day?


Paul Joseph James Martin: The hon. member for Greenwood would not, but the hon. member for Eglinton would.


James MacKerras Macdonnell: I am glad we have got into committee. In committee questions have to be asked and sometimes answered and I think we get nearer to reality, but one thing is becoming very apparent, namely that the government prepared to stroll into this legislation without nearly as much knowledge as they should have had, merely hoping for the best. I must admit they have been frank about that. They say in effect: We do not know whether much will happen; we do not know what kind of benefit it will have. We hope for the best,

but we are not very sure. I feel that the same principle is being used with regard to the wording of this legislation. The effect of what we are doing now is most serious. We are creating a new crime. Those who are more competent than I to discuss the terms of the legislation and who have been in the courts in cases affecting combines legislation are suggesting that this matter should be taken seriously; they are suggesting that it is worth more than tired and tiresome calls from across the gangway of "carried". Hon. members will not make very much impression that way. All they do is to waste time.
I have two or three remarks I should like ,o make. I have no apologies for being here md speaking on this, none whatever. If hon. members will look back they will find many Instances where not four or five days but several times four or five days were taken on measures less important than this. This is an important measure, and as far as I am concerned I will talk as long as I even hope I have anything to say, but like the Minister of Finance who was cheered so loudly earlier today when he announced he talked only when he had something to say, I hope I have something to say. Whether you have something to say in this house very often appears to depend on how many people are ready to bang the desk when you say it.


Stuart Sinclair Garson: Hear, hear.


James MacKerras Macdonnell: I may say
that we get used to this state of affairs. It used to bother me a lot, but it bothers me less and less; and sometimes, even though I am a very pacific man, it arouses a certain sense of opposition.
As I say, I am glad we are in committee because it seems to me we are getting closer to things. There is not the same amount of sparring. Questions and answers really produce something nearer to a meeting of minds. I submit that every minute since we have been in committee, every question asked and sometimes answered has made clear the hollowness, the make-believe of this thing. I do hope that the consumers are not going to mortgage their future on what they think is going to come to them out of this measure, because it seems to me the bitter irony has now become more apparent. This is a measure which, in some way I cannot understand, was supposed to be in aid of the consumers. It seems perfectly clear now-and my purpose in rising is to ask a few questions of the minister-that it is inevitably going to set up pressures tending to further combinations, monopolies and near monopolies. That is not something any of us want. I say I do not think any one of us in this house wants it, but we have to consider the consequences
Combines Investigation Act of our acts. When people pass statutes they have to try to figure out, even though it is the twenty-eighth day of December, what those acts are going to mean. Only the lawyers will be glad if we pass a statute that is full of vagueness, and which will raise a dozen lawsuits on every subsection. I do not suggest the minister is a lawyer of that kind. Of course there may be some, though not in this house.
I just want to interject one small thing. This is not original. I am sorry to repeat it, but I will be very brief. I just want to say a word on the expectation that this was going to have an anti-inflationary effect. That seems a dim, dim memory. I will say that the government has been pretty frank about it. As an anti-inflationary measure we know now you might as well try to catch Niagara in a teacup as believe that this measure is going to do anything to help out. As a matter of fact-


Paul Joseph James Martin: The desks are banging now.


Mr. Fournier (Hull):: At 6.15.


James MacKerras Macdonnell: Do we stop at 6 o'clock or 6.15?


James MacKerras Macdonnell: I think I am good for that.
Now, I think we should put in a word for the consumer. Of course we have listened to this tiresome talk-and how tiresome it gets! I will not worry about it any longer- that we in the opposition are here representing the big interests. The hon. member for Spadina was worried about that yesterday. He had it on his mind and he, of course, preached a homily about it. But as I say, when we come back to think about the poor consumer and what he will get out of it, we are reminded of the old couplet-with one word altered, because I would not like to use that word as applied to the minister- Oh, what a tangled web we weave,
When first we practice to mislead!
It is nice to remember the words, to go back across the centuries to the language used in the speech from the throne with regard to the inflationary measure. That was to be a measure effective "in counteracting inflation without impairing our free institutions". That is in the true Liberal tradition. I think those were the words of the hon. member for Spadina yesterday-"without impairing our free institutions". Here we have been busy all week creating a new crime which we do not know anything about, and we put it into words so that hon. members opposite may understand. And that is described as doing something "without impairing our free institutions". What a task for a Christmas season!
2490	HOUSE OF
Combines Investigation Act


Paul Joseph James Martin: You were never in better form.


James MacKerras Macdonnell: I do not
wish to talk just for the sake of talking. I want to be like the Minister of Finance, and only talk when I have something to say.


Charles-Arthur Dumoulin Cannon: Does the hon. member mean that he is now talking for the sake of talking?


James MacKerras Macdonnell: I will have to leave you to judge that. I never certify myself. Reflected light is much better, if you can get it. But I will say this, that I think the government made clear their attitude about this inflationary business; because so far as I know-and I am ready to be corrected if I am wrong-there were no figures of any kind given or attempted to be given to show how this can in any way affect inflation. It was just a hope. It was a hope, however little it may be. And so far as we can see, it will be microscopic. So far as the consumers are concerned it will be negative. They will have red figures, and they will know what that means.
Here is another fact you have heard before, but I mention it to make my speech complete on the record. There was a way to curb prices. The way was open before them. We told them clearly what they should do; everybody knew what they should do. All they had to do was reduce taxes. We told them that time and again. We have all told -them that, but they would not do it.


Joseph-Alfred Dion: Order. I do not wish to interrupt the hon. member, but it seems to me he is going somewhat far afield.


James MacKerras Macdonnell: Mr. Chairman, my only explanation is that I have been led away. However I will come back and talk about the bill. But I think hon. members will agree that I was at least talking about something-if, perhaps, it was niot about the bill.
I feel -that in this measure we have reached a position of very considerable irony; because it seems to me that while perhaps resale price maintenance was never invented for that purpose, it did in fact produce the result that a large number of retailers were able, in effect, to co-operate. They had all their advertising done for them. It seems perfectly clear now-and -this is a question I am coming to in a few minutes-that this is going to be made a crime. That is the point I am coming to, at any rate; that -these acts are going to be made a crime, and that the retailers will have to resort to all sorts of devices to be able to co-operate. Co-operation, I think, is a very natural and good thing. It is good to be able to co-operate. There is
[Mr Macdonnell (Greenwood-).]

a recognized and traditional method of cooperation. You may say it was rather incidental, and -that perhaps -the manufacturers did not intend it -that way; but we are ready to take credit for the consequences of our actions even if we do not fully intend them.
Do you think for a moment the government would ever refuse to take credit for some act because it turned out by accident to be beneficial, just because they had not intended it? Of -course they would take credit, all the credit they could get. And I think resale price maintenance is entitled to take whatever credit it can in that indirect way; and it is entitled to a lot of credit.
Earlier in the afternoon, when some questions were -being asked the minister which he found difficult to answer, the question came up very clearly as -to the position of a retailer, let us say, who would no longer find himself in a position where his advertising was done by the vendor of a branded product. And if we are going to have problems, and there are going to be problems to answer as to how they can cooperate-and let me say that I am sorry none of the socialist members are here because they talk a lot about co-operation-


An hon. Member:: Not one of them is here.


James MacKerras Macdonnell: But have
they fallen for this measure? As the hon. member for Eglinton has said, if there is anything certain about this measure, whatever its intention was, it will not bring down prices. No one has ever given assurance -that it will. But some things are certain, -and the first is the fact that it will give greater advantage to certain large distributors; second, that it will be a greater effort for the' small retailers to resist these huge -colossi, as they were called earlier in committee. They will, of necessity, have to try to co-operate.
Now co-operation, we have always been told in this house, is a good thing. I submit it is an irony that this bill will have the effect of jeopardizing and perhaps destroying that co-operation.
The point I wish to make is this, and I would ask the minister this question: Tip Top Tailors are, I believe, rendering a very useful service because they supply a good quality of goods at a very reasonable, indeed a very low price. I understand their business is of this nature: First of all they are manufacturers. Secondly, they are retailers with a great many stores of their own. Then thirdly, they sell to other retailers. Now what will be the results of this legislation as applied to that

company? It will not affect them as manufacturers, of course. It will not affect their retail stores. But what about the other retailers who have been selling their goods? Will they be able, so to speak, to get under the cover of the advertising put out by Tip Top Tailors; or will that be an infringement where, as the minister described this afternoon, the retailers could not get together.
Before I sit down and before the minister answers I would like to refer to two or three methods which I understand are being used now by individual retailers to try to meet- and it is difficult because it is only arising- a situation which will be closely parallel to what will appear among the retailers when this bill is passed. I am told that the Red and White stores were pioneers in co-operative advertising and that this advertising was a factor in keeping the independent merchant in business in the face of the modern development of department store advertising. Secondly, in the case of Red and White stores I understand that the individual merchant who owns his store pays a fixed sum per week to the wholesale house as his share of the cost of advertising. That is given as an example of resale price-fixed items being advertised and the establishment of offering prices. There is a third illustration from the United States which may be somewhat different, although not substantially so. It is recalled that thirty or more years ago in the United States a printers' association published a list of suggested prices for its membership. This service had to be withdrawn from the membership, but it was replaced shortly after by a private organization which sold the same service of suggested prices to printers throughout the United States at an annual fee.
I put this question to the minister, particularly with regard to Tip Top Tailors and these other illustrations I have given. It seems to me these cases I-have mentioned and those that came up this afternoon indicate that whatever effect this bill is going to have, it is inevitably going to create a problem which will tax the ingenuity of skilful lawyers. When I say that, I am not criticizing them. What is being proscribed here, what is being attacked here, is something which has the imprimatur, you might say, of some of the best and finest brains that have studied this question.
People who are treated in this way are going to have a sense of injustice. I think it is a terrible pity when legislation is passed which will leave a sense of injustice in the minds of thousands and thousands of citizens. If we did not have enough evidence before coming into committee, surely we have
Combines Investigation Act enough now to show that this is half-digested, that it has not had the discussion pro and con that it should have.
Leaving that, I come back and repeat that it seems a thousand pities that we have to pass a bill which no one can bless any more than to say that he hopes it may somehow do good whereas, on the other hand, its evils stick out just like red flags.
At 6.15 p.m. the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
James MacKerras Macdonnell: Mr. Chairman, just before 6.15 I had asked the minister certain questions. Perhaps he would answer them now and then I can make any further observations I have.


Stuart Sinclair Garson: I would prefer my hon. friend to repeat his question so I will be sure I have it in the exact terms in which he asked it.


James MacKerras Macdonnell: The minister will recall I was referring to the difficulty which it seemed to me would arise- indeed it became very evident-in the case of retailers who in effect through resale price maintenance have had a method of co-operating; that is to say, they had their advertising done, and that has been one of their chief problems. We were given an illustration this afternoon of the difficulty of common advertising within the existing law if it is to be done by the retailers themselves. I brought to the attention of the minister the instance of Tip Top Tailors, describing them as first of all manufacturers, second as retailers with quite a large number of stores of their own, I believe, and third as having relations with other independent retailers.
I said to the minister that as I understand it what will happen will not in any way affect their own selling operations to the extent they act as their own retailers, but I said it seemed to me that the independent retailers who have been using Tip Top Tailors' goods would now be faced with the problem which came up several times this afternoon, and I asked the minister to state just where in his opinion they would be left. Of course the background of my question was the fact that apparently the co-operation which they have been able to exercise up to the present will have the difficulty now facing it which, as I understand it, was outlined several times this afternoon.

Combines Investigation Act


Stuart Sinclair Garson: May I ask my hon. friend if the advertising he has in mind contemplates the naming of the associated dealers in the advertisement?


James MacKerras Macdonnell: That is one of the questions I wanted to ask the minister.


Stuart Sinclair Garson: My hon. friend must give me a statement of the facts upon which he wants an opinion.


James MacKerras Macdonnell: Let me ask
the minister to answer it on both suppositions, that their names will be mentioned and that they will not be mentioned, the two alternatives.


Agar Rodney Adamson: In many cases they are mentioned. I have seen advertisements with the names of the Arms.


Stuart Sinclair Garson: Are the suggested prices also mentioned?


James MacKerras Macdonnell: I understand so.


Stuart Sinclair Garson: Your question is whether, if Tip Top Tailors issue an advertisement naming suggested retail prices and the names of their dealers throughout the country, that would be made unlawful by the present amendment?


James MacKerras Macdonnell: That is
really the question. I understand that the prices are what are called nationally advertised prices. The advertisements are well known.


Stuart Sinclair Garson: I apprehend that the arrangement for what we may perhaps call a common advertisement by a manufacturer and associated dealers, and naming suggested retail prices, which is legal now, will continue to be legal after this amendment is passed provided it does not form part of a requirement or inducement to the said dealers to sell the advertised goods at the suggested retail prices and does not eliminate competition to such a substantial degree as to amount to a combine. Before my hon. friend looks too mystified by that answer, may I say that the advertisement per se is quite all right provided it is not a part of or associated with a deliberate contravention of the proposed resale maintenance provisions of the Combines Investigation Act.
I should like to make the suggestion it is pretty difficult to imagine a manufacturer advertising prices for his dealers in that way after this amendment comes into effect unless there is some arrangement for those dealers to adhere to those prices. I should think the cautious manufacturer who is desirous of


obeying the law would overcome the difficulty by mentioning maximum prices only, which he has a perfect right to do under the proposed legislation.


Gordon Knapman Fraser: I asked the minister this afternoon if they would not have to put in their advertisements that the price was not more than a certain figure, and he said no, that they could carry on as at present.


Stuart Sinclair Garson: With all deference to the hon. member for Peterborough West, I am quite prepared to have Hansard stand with his question and my answer. That will speak for itself.


Gordon Knapman Fraser: That is what I asked. I asked if they would not have to put in not more than such and such a figure.


Agar Rodney Adamson: There is a common device in the advertising of a line whereby all the dealers in a certain community will take a full page advertisement to advertise a nationally known branded article or group of articles, General Electric, Westinghouse, Mof-fatt, or half a dozen other nationally known products. All the local dealers are mentioned at the side of the advertisement and in the centre the articles for sale are named and the price. I assume that under this law that will be illegal.


Stuart Sinclair Garson: That is not what I said. I chose my words as carefully as I could. I said that would be quite all right provided it did not form a part of a requirement or inducement. In other words there is no harm in the advertisement itself, but if the advertisement is employed as a device or part of a device whereby the manufacturer induces or requires the dealer to sell at not less than that suggested price it will become an offence under the act. In other words the man who wants to obey the law, who wants to confine himself merely to advertising his product and, if you like, the names of his dealers, and the suggested resale prices and who stops there will be all right, but the man who employs that device of advertising as part of a scheme to impose resale price maintenance upon his dealers will contravene the act.


Agar Rodney Adamson: I am not learned in the law but to me that would seem to be, in legal terminology, a nice point. What is an advertisement if it is not an inducement to people to buy? If a manufacturer, the General Electric company or any of these others I have mentioned, puts an advertisement in the paper indicating the dealers, surely that is an inducement for the dealers to sell and the public to buy. If they are not inducing people to purchase their goods, surely there is no sense in advertising.


Stuart Sinclair Garson: I assumed the hon. member had read the bill and had noticed that the bill refers to a requiring or inducing the retailer to sell the goods at not less than a certain price. It is not an inducement to the consumer. The whole point of the matter is this, that there is nothing wrong with a manufacturer having this common advertisement naming his price or naming his dealers providing it definitely stops at that; and then each one of these dealers is at liberty, once he has paid for the goods, to sell them at any price he pleases, except that he must not exceed the maximum price the manufacturer may have imposed.
However, I agree with my hon. friend that publication of an advertisement like that does at least set up somewhat the prima facie appearance of there being an understanding that these prices will be maintained. For that reason, as I suggested a moment ago, I would think that a manufacturer who was desirous of complying with the law, and who was a cautious man, would name the maximum price in this advertisement which he can do under the proposed amendment, and then there would be no question at all about his position. Those who buy from the retailers would know they would not have to pay more than that price, and possibly it would be less.


Agar Rodney Adamson: I have read the bill, and the minister has stated exactly the difficulty that does arise. While the bill mentions minimum prices and the prohibition of maintaining prices, it is surely fruitless for a manufacturer to have an advertisement listing his dealers-which is an expensive mode of advertising-and then state a maximum price. In effect he would be saying, "Go to it, boys, and make your own deal with each one of these dealers." In ordinary terms of he trade, that seems to me an unrealistic approach to the thing. It seems to me that if you are advertising a motorcar or any major piece of equipment needed for the house, you are advertising it at a price. You advertise two things, the quality of the goods and the price at which they are sold. You would seem to be saying this is the quality of the goods and this is the maximum price, but get it for what you can. There is a list of the dealers in the advertisement, but the implication is that the stated price is not necessarily the price at which you can buy the article. This is going to be a great restraint upon trade, because you may go to your local dealer for a certain piece of equipment and he may give you $10 off the maximum price, another dealer may give you $2 off and another may not give you anything.
Combines Investigation Act In point of fact it is going to be very confusing, and very difficult to establish a proper price to pay for a stove or something like that of a certain quality.
I admit that it may be desirable, but I think it is going to be confusing. You cannot name a suggested price, but you can say what the maximum price will be. As the trade is now, many of these goods are sold on a trade-in basis and a suggested price. If a person knows a dealer he may get a better allowance on the article he trades, so there is not much rigidity there but the suggested price is the same. If you have a suggested price and a maximum price, it seems to me you are going to have quite a bit of confusion in the merchandising of this type of equipment. Whether it is good or bad economics, or whether it is good or bad socially or any other way, it seems to me you are going to have a certain amount of confusion which is not desirable.


James MacKerras Macdonnell: I want to return to my question for a moment. I am quite prepared to believe it is my own limitation which brought it about, but I must admit that after hearing the minister make an explanation of the necessity of ascertaining what was in the mind of the dealer when the advertisement was put out, I really felt that one would need a psychologist or mental analyst as well as a lawyer to understand it. If anyone asked me to repeat what the minister said, summing up all I could get out of it I would say that if you broke the law, you broke the law.
Let us go to the case of Tip Top Tailors and the question of the advertisement. Incidentally, it seemed to me as I was listening to the minister that we have been talking so much about resale price maintenance as though it were a minimum price that we have overlooked the fact that it is also a maximum price. Let us go back to Tip Top Tailors and the situation I put to the minister. Presumably they will be able to advertise just as they have been doing at a certain price, that is in so far as they are selling themselves. Would the minister agree with that?


Stuart Sinclair Garson: Yes.


James MacKerras Macdonnell: Then I understand that if Tip Top Tailors are going to advertise in such a manner for the independent retailers who have been acting as their agents, or whatever the proper legal term is, if they are still going to be allowed to carry on business and sell goods through the independent retailers, then the terms of advertisement have to be changed1 to state that is the maximum price?

Combines Investigation Act


Stuart Sinclair Garson: No. I was afraid my hon. friend would misunderstand my reply so I took the precaution of putting it down in writing to enable me to refer back to it.


James MacKerras Macdonnell: It was not
deliberate, I may say.


Stuart Sinclair Garson: I know that, but these questions that are being asked arise out of the bill before us which has to do with resale price maintenance. They also involve consideration of the Combines Investigation Act itself, and therefore, even for a lawyer much less a layman, these questions present some complexities and require careful and accurate statements of fact as a basis for a question and a careful reply. What I said was that the arrangement for a common advertisement by a manufacturer-in this case Tip Top Tailors-naming associated dealers and suggested retail prices, which is legal, will continue to be legal after this amendment is passed provided1 it does not form part of a requirement or inducement to the said dealers to sell these advertised goods at the suggested retail prices and does not eliminate competition to a substantial degree so as to amount to a combine; that is, so that it is not a case of resale price maintenance on the one hand or a case of a combine on the other.
As I said before-and I have not this written out-the manufacturer who wants to obey the law and who is not going any distance beyond this advertisement to require or induce his associated dealers to sell at not less than these suggested prices will, I think, have no difficulty. But the manufacturer who uses this advertisement along with other devices in order to require or induce his dealers to practice resale price maintenance and not sell at less than that figure will contravene the act. It was for that reason I suggested that a manufacturer who wanted to be quite in the clear and in compliance with the act could do so by no more complicated device than simply naming his price as a maximum price.


James MacKerras Macdonnell: It has been both maximum and minimum.


Stuart Sinclair Garson: No. If he names a minimum price, that is a price below which the dealer cannot resell.


James MacKerras Macdonnell: Would the minister not agree that it is a maximum in this sense, that the manufacturer would object just as much if the dealer sold above that price?


Stuart Sinclair Garson: He would object if he sold above that price; but under the proposed amendment the manufacturer can fix and enforce a maximum price whereas he cannot fix nor can he enforce a minimum price. He cannot prevent the dealer from going

below his suggested price, but he can prevent him from going above the suggested price.


Mr. Brooks:: May I ask the minister this question. Could not his price be both his maximum and minimum? Could they not both be the one price?


Stuart Sinclair Garson: Yes.


Alfred Johnson Brooks: Yes.


Stuart Sinclair Garson: Well, no; it could not be a minimum price because a minimum price is barred. A minimum price is a price below which the dealer cannot go, and that is barred by the proposed legislation. But the manufacturer can fix a maximum price because, under the legislation, he will not only be able to fix a maximum price but he can take any steps that are proper to enforce it.


Some hon. Members:: Carried.


Agar Rodney Adamson: Might I suggest that, in order to overcome the difficulty, advertisements will have to have at the bottom of them some such lines as advertisements for stocks now have in order to overcome S.E.C. difficulties: "These goods having been sold, this advertisement appears as a matter of record only." There is one question I should like to ask the minister in connection, with subsection 3 which reads as follows:
No dealer shall refuse to sell or supply an article or commodity to any other person for the reason that such other person . . .
And so on. The reasons given there are price and other things. There is one case, I think, where a manufacturer was unsatisfied with the method of marketing adopted by the dealer. I think there was one case where the manufacturer's products were sold in an unattractive way, and another case where they were sold together with second-hand goods.


An hon. Member:: What product?


Agar Rodney Adamson: The manufacturer said: I will not supply you with any more goods because your practice of retailing destroys the quality value which my goods have built up during the years I have been advertising nationally. I do not know whether that case was ever tried in the courts, but I know of one or two cases in which a manufacturer refused to sell to a dealer or to a wholesaler.


An hon. Member:: What cases are they?


Stuart Sinclair Garson: What was the question?


Agar Rodney Adamson: Whether it is merely a matter of price or whether a manufacturer

may withhold his goods from a retailer because he is dissatisfied with the method of retailing.


Stuart Sinclair Garson: I think the bill makes it quite clear that whatever reasons may be lawful at the present moment for a manufacturer refusing to deal further with his retailer are left quite untouched by this bill, except the reason that he has broken a price which the manufacturer has fixed. If the manufacturer refuses to deal with the dealer because he is a poor credit risk, for example, or for any other good reason, his right to take that position is left quite undisturbed by this present bill.


Agar Rodney Adamson: And if it is because of his method of marketing, he is left quite free?


Stuart Sinclair Garson: Assuming that under the law as it now stands he could sever his connection-and I suppose that would be the case -then this bill will not affect him at all.


John George Diefenbaker: Mr. Chairman, I should like to ask the minister to explain subsection 2 of section 37A which reads as follows:
No dealer shall directly or indirectly by agreement, threat, promise or any other means whatsoever, require or induce or attempt to require or induce any other person to resell an article or commodity . . .
And so on. What is contemplated by the words "or any other means whatsoever"? What other means would there be than agreement, threat or promise that was contemplated in drafting the bill in this form?


Stuart Sinclair Garson: Those words were inserted to indicate that the banning of these acts of requiring or inducing dealers was complete and that it did not matter by what means the requiring or inducing was brought about, it would be contrary to this section.


John George Diefenbaker: The minister must have in contemplation means that have been used other than agreement, threat or promise. What other means have been utilized over the years which this portion of the proposed amendment to the law is intended to cover?


Stuart Sinclair Garson: I think the words my hon. friend has read-"any other means whatsoever"-are largely self-explanatory.


John George Diefenbaker: Yes.


Stuart Sinclair Garson: They include all means of every kind which can be foreseen now or which cannot be foreseen. There is no limitation to them at all.


John George Diefenbaker: I put it this way. When this was drafted had the minister any means in mind other than agreement, threat or promise by which the resale had been affected in the past?
Combines Investigation Act


Stuart Sinclair Garson: No; if we had we would have included them before we listed "any other means whatsoever".


George Alexander Drew: I recall that earlier today the minister was very emphatic in his statement that if we are to create some kind of a crime, then surely we must define the crime. With that one statement the minister made today I agree. Surely if there is to be a crime that will call for severe penalties, then that crime should be defined so anyone may know it. Here in this legislation we have the statement that:
No dealer shall directly or indirectly by agreement, threat, promise or any other means whatsoever, require or induce or attempt to require or induce any other person to resell an article or commodity . . .
Before hon. members pass this they should know what the crime is that is contemplated by that all-inclusive term.


Stuart Sinclair Garson: With great respect, Mr. Chairman, I think the crime is very explicitly defined by this section. The crime is that of requiring or inducing or attempting to require or induce any other person to resell an article or commodity, and then:
(a) at a price specified by the dealer or established by agreement-
And then follow (b), (c), (d) and (e). The reference to agreement, threat, promise or any other means whatsoever is a listing of the means or method by which the crime may be committed. The crime itself is the requiring or inducing or attempting to require or induce, and I think it is very explicitly stated. But there may be means of committing that crime other than by agreement, threat or promise, which we cannot now foresee and we simply describe them in the terms of the legislation as "or any other means whatsoever". It is not unfair to the accused because a conviction cannot be obtained against him unless we can prove that he has required or induced a dealer to commit the offence.


Mr. Rowe:: You had better put it verbally.


Edmund Davie Fulton: I should like to turn for a moment to another aspect of this matter, which has been referred to in the course of the previous discussion. Has the minister or the combines commissioner given any consideration to the type of legislation or protection which they have said might be introduced if the practice of loss-leadering or other abuses which have been referred to should become widespread? I ask the question because it must be agreed that should these practices in fact become widespread; should it develop that there is, as I maintain there is, a real danger of loss leaders, then it will not be sufficient just to act at leisure to work out some legislation to protect against it.

Combines Investigation Act Because of the pace at which economic developments proceed nowadays it will be necessary to act very quickly if we are to protect a large number of retailers and prevent a situation which might cause devastation in the retail trade generally. Therefore I ask the minister whether any consideration has been given to the type of legislation, or additional protection, which might be recommended to parliament-those were the words used-if it should turn out that as a result of the present legislation loss-leadering and such other abuses-unfair competitive practices in general-become widespread.


Stuart Sinclair Garson: My hon. friend himself was a member of the joint committee, and will recall the terms of the committee's report. I think he was one of those who did not concur in it. The committee said they did not think that as long as the present economic conditions continued there was any great likelihood of loss leaders or of predatory price cutting, but in the event of it taking place they suggested that the provisions of section 498A of the Criminal Code, which was designed for this very purpose, should be very rigorously enforced by the combines investigation branch, and that if the provisions of section 498A should prove inadequate for the purpose for which they were originally drafted we should consider other legislation to meet the particular kind of abuse which would then be apparent.
Our experience in connection with section 498A has been that as long as economic conditions have remained in the condition in which they have been during the past ten years or more there has been no call upon the combines investigation branch for the invocation of that section. And that has been why on only a few occasions have we had to invoke it.
We have given a great deal of thought, not only at the present time but on previous occasions, to the question of loss leaders. On one point, particularly as to what is a loss leader, my hon. friend from Kamloops will recall that before the joint committee we questioned-and he was one of those who took part in the questioning-several of the witnesses to secure a definition of loss leader from them. He will recall that the definitions were in great variety, and that those who gave them were wary about committing themselves to what they would regard, and what they thought the trade would accept, as an adequate definition of a loss leader.
Should it become apparent that section 498A is not adequate to deal with any abuse of that sort which might make its appearance, then we are in a position, because of the work which has already been done, to


follow out quite quickly any policy which might be agreed upon by the government at that time. But our own view coincides with that of the .committee, that as long as present economic conditions continue there is no substantial likelihood of widespread predatory price cutting or loss leaders.


Edmund Davie Fulton: I take it from the minister's
answer, then, that the government have not in contemplation any legislation which they might introduce quickly should it turn out that the practice has become widespread and that retailers are suffering. In other words they will wait until after the horse is stolen before locking the door.


Stuart Sinclair Garson: I think I would prefer to
have my remarks stand as they are without the modification my hon. friend has attached to them.


Edmund Davie Fulton: Perhaps the minister might
care to comment on the statement made by the Prime Minister yesterday when he said, as reported .at page 2385 of Hansard:
I made the statement the other day, and I repeat it, that if as a result of this legislation-
That is the bill now before us. I continue:
-or as a result of any other condition there develops a contrary abuse-
Having in mind, obviously, this practice of loss-leadering, the Prime Minister continued:
-the government will consider what recommendation it should make to parliament to deal with that contrary abuse.
Am I to understand that the government has something in mind by way of a concrete proposal to take care of that situation, should it be shown that the danger exists?


Stuart Sinclair Garson: What my hon. friend is to understand and what I have already tried to explain to him is that in our department we have given very careful consideration to this question and, should the occasion arise in which legislation is required, a great deal of spadework has already been done. I think we would be able quickly to carry into effect any policy on which the government might come to an agreement, in line with what the Prime Minister has said.


Edmund Davie Fulton: Can the minister tell us what that spadework is?


Some hon. Members:: Oh oh.


Edmund Davie Fulton: I am sorry, but I have to say I am not in agreement with hon. members opposite who take this sanguine view of the position today with respect to the safety of retailers throughout Canada. They seem to believe that the independent merchants are

not faced with any danger if this legislation is passed. Now, I am trying to be reasonable. It is difficult to make any sense-


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: It is difficult to make any sense out of the growls and mutterings that arise from the ranks of the Liberal party opposite, particularly interspersed as they are by senseless comments of the Minister of Finance.


Douglas Charles Abbott: And you are a pretty good judge of senseless comments.


Edmund Davie Fulton: We so often find, when Hansard comes out the following day, that the Minister of Finance has excelled himself in this regard.


Douglas Charles Abbott: Hear, hear.


Joseph-Alfred Dion: Order. The hon. member should direct his remarks to section 1; and I would ask other hon. members not to interrupt.


William Earl Rowe: Be careful of the ministers.


Joseph-Alfred Dion: I would ask hon. members not to interrupt, and I would also ask the hon. member who has the floor to confine his observations to section 1.


Douglas Charles Abbott: Hear, hear.


William Earl Rowe: Be careful of the ministers.


Edmund Davie Fulton: Perhaps, Mr. Chairman, you might amend your request to hon. members opposite and suggest that if they wish to interrupt they do so one at a time. I can take them, one at a time.


William Earl Rowe: And stand up when you interrupt, too.


James Joseph McCann: You try it.


William Earl Rowe: Oh, you are the great legal light over there.


Edmund Davie Fulton: As I was about to say, had I been able to make myself heard-


Joseph-Alfred Dion: Order.


Edmund Davie Fulton: -many of the witnesses before our committee expressed themselves very definitely to the effect that, although they were somewhat in favour of the legislation to eliminate the practice of resale price maintenance, they were of the opinion that at the same time some protection must be afforded to the retailers of Canada against the practice of loss leaders. In that regard I would like particularly to refer to the evidence of Mr. Bengough, president of the Trades and Labour Congress of Canada, when he was being questioned by the committee. He was asked
Combines Investigation Act what, in his view, should be done about this practice. At page 372 of the proceedings we find this question:
What is your view; would you agree that it would only be fair, if we are going to introduce legislation to outlaw in blanket fashion all price maintenance agreements, that we should at the same time introduce legislation to prevent the loss-leader practice?
To that Mr. Bengough replied:
"I think it would be vital it should be done."
What we are concerned about here is that we are confronted with legislation which, without any necessity on the part of the crown to prove that a particular price maintenance agreement operates to the detriment of the public, makes the general practice of resale price maintenance illegal. If that becomes law, there will be no method left by which an individual retailer, or retailers in general, can protect themselves against the practice of loss leaders. I do not think any member opposite cani deny that statement. If this practice of resale price maintenance is outlawed, as it will be by this legislation, there is no method by which the retailer as an individual or retailers as a class can protect themselves against the loss-leader practice. Therefore the question surely is pertinent: by what alternative method does the government intend to protect retailers against the loss-leader practice? Because it has been proven to be the greatest threat against the existence of the individual independent retailer.
I am not going to read again the evidence I placed upon record before with regard to the findings of the royal commission on price spreads. I shall not put on record again the dangers to small retailers from the loss-leader practice, the extent to which it has been used, and the extent to which in the retail field it has led to the concentration of power in a few hands. Those facts are well known to any hon. member who will open his mind to the situation which does exist.
What we are asking is this: What method have the government in contemplation, what steps have they taken, and what steps are they prepared to take to protect retailers against the abuses to which they have been exposed in the past, against which they have been protected by the resale price maintenance system and to which they will again be exposed if this legislation passes? The minister has said his department feels it is well able, as a result of its research and studies, to take steps to deal with the situation rapidly should it arise. I am asking the minister to outline what those steps are, and what conclusions they have arrived at.


Some hon. Members:: Carried.
2498	HOUSE OF
Combines Investigation Act


Joseph-Alfred Dion: Shall the section carry?


Some hon. Members:: No.


John George Diefenbaker: Mr. Chairman, the matter that has been raised by my hon. friend is one that exercises the minds of retail merchants everywhere in this country. I would point out particularly that it is a matter of concern to the retail merchants of Saskatchewan and their organization in that province. One of the requests they have made-it is a reasonable one, and should not be treated in the cavalier and disrespectful manner shown by some hon. members-should be faced squarely and fairly. The retail merchants of Saskatchewan were denied the opportunity of presenting their arguments in support of their brief. One of the things they fear particularly is set forth in the current issue of the Western Retailer. I refer to the question of loss leaders, which has been discussed by the hon. member for Kamloops.
This brief, prepared by Mr. R. E. Walker, a man of long experience in the retail trade before he became chairman of the retail merchants association of Saskatchewan, requests information from the government as to what would be done to protect the retail merchants from the dangerous possibility of loss leaders. The Minister of Justice has said that his experience and that of the government is that there is nothing to fear at this time, with economic conditions as they are today. In the brief of the retail merchants of Saskatchewan the following appears:
We have long maintained that we can compete-
And when they say "we" they mean the independents.
-with mass merchandisers if they will refrain or preferably if they are prevented from instituting unfair practices which are not within our capacity to meet.
And the unfair practice to which reference is made at the present time is the practice of loss leaders.
We submit, gentlemen, that resale price maintenance has had the effect of restraining mass buyers from such unfair practices and which has done so, as we have attempted to demonstrate, at no cost to the public, as confirmed by the royal commission on prices of 1949. And we further submit that if resale price maintenance is declared illegal,-
By "illegal" apparently is meant if it is set aside by parliament.
-that there can be no effective legislation, confirmed by the Stevens report, to curb these vicious unfair practices so clearly demonstrated and recognized by this commission. We think it would be of interest to this committee to discover whether the Hon. Lester B. Pearson and the Hon. James L. Ilsley, both of whom have served as cabinet ministers in the present government, and both of whom were members of the royal commission on price spreads-	*


The hon. gentleman was secretary of that commission, as I remember.
*-would testify that the conclusions which they arrived at through a study of the history of many, many years of business, were only valid for a temporary period, or whether they consider these conclusions to remain valid.
The conclusions to which reference is made were those reached by the Stevens commission, and they were as follows:
The competitors of the store using the loss leaders are, however, the persons chiefly affected. That the deliberate use of cut prices to draw patronage away from competitors is an unfair trade practice, is quite clear. Such reductions are not prompted by any desire to serve the public by giving lower prices. One purpose is to attract customers to whom the store hopes to sell goods that are not loss leaders, at substantial profits. Another purpose is to create the illusion of lower prices on all articles. That this end is not always attained does not in any way lessen the unfairness of good practice.


Mr. Gardiner:: Why did not the Bennett government act upon the report?


John George Diefenbaker: Let me say to my hon. friend that all the legislation which the Bennett government endeavoured to pass in order to meet this situation was challenged by the government of my hon. friend.


Mr. Marlin:: Not in that instance. That is not what Mr. Stevens said nor what the country subsequently said.


John Sylvester Aloysius Sinnott: That is not the answer you got in 1935.


John George Diefenbaker: What happened was that after the present government came in they challenged the legislation and had the present Prime Minister as counsel in an effort to set aside the legislation. I know this is disturbing some of my hon. friends, but in 1935 their consideration was not the consumer when they submitted that legislation to the courts.


James Garfield Gardiner: You are away ahead of the story. Mr. Stevens was put out of the government because of his attitude on the issues.


John George Diefenbaker: The generous support which my hon. friends received from big business in 1935 was paid back by the submission to the courts in 1936. I want to find out whether the government accepts the views of the 2,400 merchants in Saskatchewan who compose the retail merchants' association. That association has indicated that there is a danger to small business. I want to know whether consideration has been given to the drafting of necessary amendments in order to meet this situation.
The Minister of Justice says that if things turn out badly they - will do something. It took them sixteen years to do what they are

doing now. I only hope we can have assurance on behalf of the consumers of Canada that the practice of loss leaders, detrimental to the retail merchants, and particularly detrimental to the consumers, shall not be permitted to threaten the economy of this country. That is the reason the hon. member for Kamloops asked the question he did. That is the question that is in the minds of the consumers of this country. They want to know whether this legislation is going to protect the interests of the consumer rather than preserve additional rights to big business.


Stuart Sinclair Garson: I should like to clear up just one point. I think the hon. member for Lake Centre will agree that one of the main purposes of the legislation introduced by the Bennett government as a result of the Stevens price spreads commission was section 498A of the Criminal Code and that that section was tested in the courts, found to be constitutional and is on the statute books today available to serve the purpose for which it was provided.


Edmund Davie Fulton: I may be wrong, but I do not recall the Minister of Justice saying that section 498A had ever been invoked. I would remind the minister that that section was placed on the statute books in 1935. It certainly could not be said that the economic conditions of 1934 and 1935 which gave rise to the Stevens inquiry and subsequently the royal commission on price spreads, that the terrible abuses which existed with respect to loss leader practices, were cured overnight in 1935. Vain as my hon. friends may be, ready as they are to give themselves credit, I do not think they will say that the mere election of their government in 1935 cured conditions overnight.
We must assume that those conditions continued. One of the main things the new government did was to submit the fair practices legislation of the Bennett government to the courts for the purpose of having it thrown out. It must be assumed that those economic conditions continued, as in fact they did, for some four years subsequently until the outbreak of war in 1939. If section 498A was the effective answer which the minister now says it is, will he tell us how many times it was invoked during that period? Will he tell us on how many occasions it was invoked successfully to prevent the practices against which he says it was designed as a protection? Can the minister tell us how many times section 498A was invoked?


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: It would speed things up if hon. members opposite would keep quiet so the 94699-159
Combines Investigation Act minister could hear the question. I am quite certain that the only reason the minister does not answer is that he cannot hear the question. Perhaps I should raise my voice, or in the alternative my hon. friends could be quiet enough so the minister could hear what I am saying. I will do whichever they want, but I would be obliged if the minister would tell me how many times section 498A has been invoked and on how many occasions it has been successful.


Stuart Sinclair Garson: I was not Minister of Justice during the period 1935 to 1939. Having been given no notice of his question, I cannot give my hon. friend the information which he asks. But I can tell him, as I told the house yesterday-perhaps he read my remarks-that section 498A was used by us within the past year. We will use it on any other occasion on which it is required.


John George Diefenbaker: What case was that?


Stuart Sinclair Garson: It is all in Hansard.


John George Diefenbaker: What case is it?


Edmund Davie Fulton: It may be in Hansard, but until now we did not have an opportunity to question the minister about it.


An hon. Member:: You were not here.


Edmund Davie Fulton: How was it used and to what effect?


Stuart Sinclair Garson: It was used in a case where a complaint had been received by the department under section 498A, subsection (a), of improper discounts being given to certain dealers compared with others. The matter was investigated and was accepted by the firm in question and adjusted in that way.


George Alexander Drew: Surely a criminal prosecution was not adjusted.


Stuart Sinclair Garson: The suggestion was that the trade discounts of this firm with respect to certain items were contrary to section 498A. It was not in any heinous degree at all, but complaints had been made by people in that trade. When the matter was brought to the attention of the people concerned they were very glad to adjust the list from that point on, and no further difficulties have been experienced.


John George Diefenbaker: There was no prosecution.


Stuart Sinclair Garson: No. There was no occasion for prosecution.


Ellen Louks Fairclough: I take it from what the minister says it was a matter of discrimination in the allowance of discounts.

Combines Investigation Act


Stuart Sinclair Garson: No; this was a case of the actual printed discounts which they had.


Ellen Louks Fairclough: But they had practised discrimination; they were not allowing the same discount to all people under similar circumstances?


Stuart Sinclair Garson: That is right.


Ellen Louks Fairclough: The act definitely says that is contrary to the law, so why were they not prosecuted?


Stuart Sinclair Garson: Because-


Ellen Louks Fairclough: They were given a second chance, in other words.


William Earl Rowe: Just a congenial settlement.


George Alexander Drew: Surely the government was not using the Criminal Code for the purpose of compounding a felony.


Stuart Sinclair Garson: Oh, no.


George Alexander Drew: This is interesting-


An hon. Member:: And boring, too.


George Alexander Drew: -in view of the fact that we are now asked to pass something in the nature of a criminal law. I think the house should have a full explanation. If the minister has been accurate in what he has been stating, then he was using a section of the Criminal Code to enforce some compromise which, as the minister knows, is entirely contrary to the whole principle and purpose of the Criminal Code.


Stuart Sinclair Garson: No, there was no compromise at all. It was brought to our attention that certain discounts were being granted which it was thought would contravene section 498A. The matter was brought to the atten-ion of the firm concerned. They accepted the view that was urged by the complaining company, and there has been no further difficulty in the matter at all.


William Earl Rowe: They must have been an awfully nice firm.


Douglas Charles Abbott: Just like the paper companies.


George Alexander Drew: In so far as what the minister has said is concerned-


Douglas Charles Abbott: It was not Great Lakes Paper, was it?


George Alexander Drew: -then we may take it that the government learned the Criminal Code was being broken and the government then wrote and said: You are breaking the Criminal Code; unless you correct your action and stop breaking the Criminal Code we are going to act. Is that not what the government did? Perhaps they did not go so far as to threaten.


Stuart Sinclair Garson: Just the opposite. My hon. friend is very anxious to put it in that form but, as I have told him, a complaint was received from one commercial concern to the effect that in their view the discounts allowed by another commercial concern contravened section 498A, subsection (a), of the Criminal Code. The matter was taken up by invocation of this section with the firm against which the complaint was laid. They explained what the position was, showed their records and satisfied the officials of the combines branch that the practice they were following was in order. That was communicated to the firm that had made the complaint and the matter was closed. I may say that it was brought to my attention some considerable time after the whole thing had been adjusted. I point this out, however, to indicate that section 498A, subsection (a), is an effective instrument for the purpose which it was designed to serve, as I think the leader of the opposition was maintaining a day or so ago in this very debate, and that it can be invoked again as occasion may require. In any case where any breach of it takes place with criminal intent my hon. friend need not have any concern about appropriate action being taken under it.


John George Diefenbaker: This is very revealing because the section reads:
Every person engaged in trade or commerce or industry is guilty of an indictable offence and liable to a penalty not exceeding one thousand dollars or to one month's imprisonment, or, if a corporation, to a penalty not exceeding five thousand dollars, who
(a) is a party or privy to, or assists in, any transaction of sale which discriminates, to his knowledge, against competitors of the purchaser in that any discount, rebate or allowance is granted to the purchaser over and above any discount, rebate or allowance available at the time of such transaction to the aforesaid competitors . . .
Did the evidence disclose that this company had in fact granted rebates and discounts not granted to other competitors?


Stuart Sinclair Garson: I only have the report I got from the combines commissioner, and I have related to the house everything that took place. It was thought by certain companies in the trade that discounts of this type, which in their view would contravene this section, were being allowed. The matter was investigated by officers of the department, and the concern against which the complaint had been made was able to show its good faith in the matter and that the list of discounts they were then using was in accordance with the provisions of the act. If my hon. friend wants any further information I would have to get it from those who handled the matter. However, it does prove one thing, namely that here is an effective instrument by which discounts

of that nature can be prevented. I think it is also reasonable to say that the other two subsections of section 498A are equally useful if occasion arises to invoke them.


John George Diefenbaker: That scarcely is the type of enforcement of the law one would expect. If an offence was committed the Criminal Code should not be used as a threat. Every person who breaks it should be proceeded against regardless of who that person is. Now that we have gone this far and found that the degree to which section 498A is an effective instrument consists of one case in which the wrongdoer was not proceeded against, I think possibly we should find out the name of this alleged person who, having committed an offence, was still not proceeded against under this effective section.


Stuart Sinclair Garson: My hon. friend is most unfair. There is no suggestion there was an offence committed. There was a complaint registered with the government to the effect that the discounts being granted by this concern complained against were out of line under section 498A of the Criminal Code. Upon the matter being looked into, the concern complained against, which is a very responsible and respectable concern, was able to show that that was not the case. Therefore the matter was not proceeded with, but it was very clear that if an offence had taken place it would have been quite possible to prosecute under the section.


Edmund Davie Fulton: I must say I am unable to follow the minister in his distinction between what is an unsatisfactory practice in the light of section 498A and what is an offence against the Criminal Code under 498A; but even if at the moment we are unable to get from the minister the name or firm of the individual concerned, I think the minister will agree with me that what he has said indicates that although 498A was placed on the statute books in 1935 when the depression was continuing and the conditions which were brought to light as a result of the Stevens inquiry were still prevalent, nevertheless section 498A has not been invoked, and no prosecution under it has ever succeeded, against the loss-leader practice. I think the minister must admit that emerges from what he has said. Does the minister not agree with me that that is an accurate statement?


Douglas Charles Abbott: Carried.


Edmund Davie Fulton: His colleague the Minister of Finance is asking him to agree by saying "carried". Since that is what the Minister of Finance is saying-


Douglas Charles Abbott: The Minister of Finance is just bored.
Combines Investigation Act


Edmund Davie Fulton: The Minister of Finance is always professionally bored when he is not holding the floor himself. I am sorry if the answers of the Minister of Justice bore the Minister of Finance.


Douglas Charles Abbott: It is not the answers that bore me, it is just the questions.


Edmund Davie Fulton: I should like to have an answer from the Minister of Justice to a reasonable attempt at summarizing the situation.


Stuart Sinclair Garson: I have already told my hon. friend.


Mr. McCusker:: You have to tell him four or five times.


Edmund Davie Fulton: If the hon. member for Regina would like to have the floor, perhaps-


Joseph-Alfred Dion: Order. The minister has the floor.


Edmund Davie Fulton: Mr. Chairman, I was going to say that the member for Regina-


Joseph-Alfred Dion: Order. The minister has the floor.


Douglas Charles Abbott: Thank God I did not go to Oxford.


Edmund Davie Fulton: I am grateful, too. It is bad enough to have you here without having had to put up with you there, as well.


Some hon. Members:: Carried.


Edmund Davie Fulton: I am sorry I was not able, because of the interruption by the Minister of Finance, to hear the Minister of Justice.


Stuart Sinclair Garson: I thought I had made it clear to my hon. friend that I have no knowledge of any prosecutions that took place between 1935 and 1939, or even after 1939 until 1948, when I came on the scene. Since that time the only occasion on which we have had any reference to section 498A is the occasion of which I spoke.


Edmund Davie Fulton: The only case.


Ellen Louks Fairclough: Mr. Chairman, I should like to inquire further into this incident because I am very much interested in it. In the first instance I .believe the minister said the complaint had been lodged by a competitor of the company, or so it seemed to me. Is that correct, or was the complaint lodged by a customer of the offending company? He later said the customer was the one who was discriminated against. No prosecution was launched because when the investigation was conducted it was found the practice had been corrected. Was the practice corrected or was it found that the practice had, in fact, been a policy of the company but upon there being some smoke, let us say, the fire was put out, in which event
2502

Combines Investigation Act the offending company certainly was guilty under the section; or was there never at any time any evidence of the practice?


Stuart Sinclair Garson: Mr. Chairman, I am under somewhat of a handicap in discussing this item because I have no personal knowledge of it. I have had certain conversations with the officers of the department, and the impression I have is that it was a complaint by a customer of the offending company.


Ellen Louks Fairclough: Not a competitor?


Stuart Sinclair Garson: No, I do not think I said that. It was a customer of the offending company who was complaining, as I gather it, that another customer had been given a discount which was not available to the complaining customer. Upon the officers of the department investigating the matter, the company complained against was able to show-that no offence had actually taken place and that the matter was in order. The company was able to satisfy the officers who were sent down there. If any greater detail is necessary, I would have to get it for the hon. member.


Mr. McLure:: Mr. Chairman-


Some hon. Members:: Hear, hear.


Winfield Chester Scott McLure: I want to thank hon. members for that wonderful salutation. I might say now that I believe I know the cause of it. I left here on December 20 to go home for a holiday, and I came back not to ask questions but to take part in that great event which I expected, closure. I want to ask the minister who is piloting this bill whether there is any difference between an assembler, a manufacturer or a primary producer.


Mr. Brown (Essex West):: Ask a lawyer.


Winfield Chester Scott McLure: I am lawyer enough for that myself.


John Sylvester Aloysius Sinnott: Why did you ask the question?


Mr. Hodgson:: He is like you, he does not know.


John Sylvester Aloysius Sinnott: That is a good answer.


Winfield Chester Scott McLure: I was just going to say that one gets used to these interruptions from the ivory dome. I want to know whether a primary producer and assembler is put in the same category as a manufacturer.


Stuart Sinclair Garson: A primary producer; is that what my hon. friend said?


Winfield Chester Scott McLure: A primary producer or
assembler; are they in the same category as the manufacturer, or are they called dealers?


Stuart Sinclair Garson: If the hon. member will look at subsection 1 of the new proposed section 37A he will see that it reads as follows:
In this section "dealer" means a person engaged in the business of manufacturing or supplying or selling any article or commodity.


Winfield Chester Scott McLure: We have today a dozen or two dozen farmers in my constituency who have formed a little company. It may not be a limited liability company, but they formed it to market their product. How are you going to deal with them? They set the retail price of their product. How will this bill interfere with them, or will it? Or does it interfere with any co-operatives in any form that are conducting business today without this act?


Stuart Sinclair Garson: I cannot imagine any set of circumstances under which a group of farmers or an individual farmer has ever attempted to impose resale price maintenance upon his products. I should be glad if my hon. friend could give us a concrete example of that sort of thing.


Winfield Chester Scott McLure: Any farmers' marketing
board would be a concrete example.


Stuart Sinclair Garson: I thought perhaps that was what my hon. friend was referring to. The hon. member for Annapolis-Kings asked that question earlier today.


Winfield Chester Scott McLure: I know he did.


Stuart Sinclair Garson: My answer was that if the marketing board was set up under provincial legislation, it would not be affected by this proposed legislation.


John George Diefenbaker: That opinion is extremely interesting. What is the foundation for it? Is it just an offhand opinion by the minister, or is that an opinion from the law officers? There is certainly nothing whatsoever in any portion of the Combines Investigation Act that exempts any provincial marketing board. The minister, in an offhand way, has said they are not covered by this legislation because that is a matter of provincial legislation. As to the marketing boards in the provinces, they will come within the definition of dealer. No exception whatever is made in the act, and there is nothing whatever that will deny the application of this bill in its present form, as I see it, unless something is done to exempt provincial marketing boards. As a matter of fact an exemption is made under section 498A of the Criminal Code to cover certain co-operatives because of this very difficulty. Section 498A, subsection (a) indicates as follows:
The provisions of this paragraph shall not, however, prevent a co-operative society returning to producers or consumers, or a co-operative wholesale society returning to its constituent retail members, the whole or any part of the net surplus made in its trading operations in proportion to purchases made from or sales to the society . . .
Those co-operative organizations can be set up under provincial law just as marketing boards are today set up under provincial

law. I believe my hon. friend has raised a point that is worthy of serious consideration, namely the degree to which this amendment in its present haphazard form may result in provincial marketing boards finding themselves in jeopardy. I think the minister should welcome the suggestion of an amendment in that connection, to make that point positively clear. Certainly the fact that the provincial authorities set up a municipal board does not place that municipal board above any federal law. I think the hon. member for Queens has raised a point and has directed the attention of the minister to a question that deserves more serious consideration than will have been given by an offhand opinion, unless that offhand opinion is based on the law officers of the crown having definitely indicated that, in their opinion, the section as amended will not apply to any marketing board.


Mr. Poulioi:: Before the minister answers, I should like to ask my hon. and genial friend, the hon. member for Lake Centre, if he will agree that the function of the Minister of Justice is equivalent, mutatis mutandis, to that of the Lord Chancellor in England.


Clayton Wesley Hodgson: What has England to do with this matter? We run our own parliament.


Jean-François Pouliot: My hon. friend does not understand who the Lord Chancellor of England is. I am just arguing a most important point with the hon. member for Lake Centre. Ke will agree that the Minister of Justice occupies a similar position and performs a function similar to that performed by the Lord Chancellor in England.


John George Diefenbaker: I agree that he exercises some of the jurisdiction; but the Lord Chancellor is the head of the judicial system in Great Britain, and I am certainly glad that the Minister of Justice in this country is not in that position.


Jean-François Pouliot: I am satisfied that my hon. friend agrees with me partly, if not in to to; and I will tell him this. One day I spoke to Lord Hailsham who was then Lord Chancellor of England. I said to him: My lord, are you the guardian of the king? He said: No, I am the-


John George Diefenbaker: The keeper of the king's conscience.


Jean-François Pouliot: The answer was; No, I am the guardian of his conscience.


George Alexander Drew: Mr. Chairman, may I ask if this is in the form of a suggestion that the minister needs a guardian for his conscience?


Jean-François Pouliot: No, not at all. My hon. friend was too quick.
Combines Investigation Act


George Alexander Drew: I was trying to find the relevance of these remarks.


Jean-François Pouliot: I was wondering if the Minister of Justice was not the guardian of the conscience of the leader of the opposition.


An hon. Member:: What a job!


John Sylvester Aloysius Sinnott: He has no conscience.


Edmund Davie Fulton: That is a new form of
spiritualism.


Jean-François Pouliot: There is another point that I want to stress to the hon. member for Lake Centre, and it is this. I was shocked when 1 heard him suggest that the Minister of Justice should ask the opinion of his law officers. Why did he say that? The Minister of Justice is not only the guardian of the conscience of the leader of the opposition; he is the guardian of the law. When he speaks, even in a ponderous way-


William Joseph Browne: Why does the hon. member say that?


Jean-François Pouliot: I will say this to the former judge: Even when the minister speaks not in a ponderous way, like the hon. member for St. John's West, he says: This is the law. He has no need to ask anything of his law officers. He is supposed to know the law as well as any law clerk in his department.


George Alexander Drew: That is exactly what some of us had hoped. That is the reason we have been directing questions, in the expectation that finally we might get some evidence that he knows something about this bill.


Jean-François Pouliot: He answers well all sensible questions.


George Alexander Drew: The Minister of Justice has given strong reasons why the argument that has been presented for some days, that this bill should not be dealt with in haste, should have been recognized by the government. He has indicated that there is a rather strange attitude toward the measures already on the statute books, including the only measure that can possibly deal with a threat of loss leaders which is relevant to the bill now before us. But I want to refer back to something the minister said this afternoon, because it requires some explanation. The hon. member for Lake Centre pointed out that in this case, uncertain though the terms may be, the bill now before us creates an absolute offence without any qualifications as to the motive or intent of the person who carried out the act that might be regarded as an offence against this measure. He suggested there should be some words as "without justification", or something of that kind, to indicate that the offence would only exist if in fact there was the spirit of mens rea in what had been done.

Combines Investigation Act The Minister of Justice said it was not possible or practical to introduce any such qualification, although the hon. member for Lake Centre had made it quite clear that he was not suggesting the exact words which should be used but rather that there should be some qualification which related to the wrong intent.
The explanation which has been given by the minister simply does not hold water, because there is the qualification that combinations, mergers, trusts or monopolies mentioned in section 2 of the Combines Investigation Act must be shown to have operated or to be likely to operate to the detriment or against the interest of the public, whether consumers, producers or others. The answer given by the minister is simply inconsistent with the operation of the act itself to which this is a proposed amendment. Then in the section of the Criminal Code mentioned before, section 498A, which deals with conspiracies in restraint of trade we find the words "unduly prevent or lessen competition". If in relation to transactions of this kind in other legislation the word "unduly" can be defined; if conduct that is likely to be detrimental to the public interest can be defined, then surely similar exceptions could be made in this legislation. Then it would be possible to deal with this with the likelihood that those who are carrying out some arrangement which in no way injures the public will not suffer because of the overriding prohibition contained in this legislation.
I suggest that the minister, even at this stage in the discussion, should reconsider his statement in that connection. It does not do his position justice that he should give an explanation which, if it is sound, means that we should have before us now amendments to the Combines Investigation Act removing those qualifications in regard to other combines, other joint enterprises, which certainly would be just as injurious in their effect.
The minister this afternoon gave one extremely interesting explanation of the nature of the grounds that might be employed by a dealer to deny to a retailer the things that he sought to buy and sell. One of the grounds was if the dealer maintained a slovenly establishment. This is the explanation given by the minister piloting the bill. Does that mean a dealer is going to become the censor of the cleanliness or tidiness of the retailing establishment?


James Garfield Gardiner: They do.


George Alexander Drew: Because that is the only thing his words implied. If that is going to be the condition, then surely no dealer will ever have any trouble in refusing to deliver the 
supplies the retailer has asked him to deliver. The minister made an interjection that left the impression that he was suggesting he had not said this, but he used the words "if he maintained a slovenly establishment."


James Garfield Gardiner: They do that now.


George Alexander Drew: That could only mean an
untidy establishment, an establishment not having the appearance or the tidiness approved by the dealer.


William Earl Rowe: The minister had better get a
new broom.


George Alexander Drew: If that is the kind of ground
on which the protection that is supposed to be afforded to the dealer under this legislation can be avoided, then this legislation is certainly a fraud on the retailer as well as on the public.


Stuart Sinclair Garson: Mr. Chairman, if I have left
the impression which the leader of the opposition has just stated I would feel with him that the bill was an improper one. But I think he has misunderstood my remarks. At the present time the manufacturer may discontinue the arrangement he has with his dealers for a number of reasons. Amongst others, if he is manufacturing goods which have to be exposed for sale to advantage in a neat establishment, he may not want to continue selling to the retailer when he maintains a slovenly one. He may want to discontinue his arrangement with the retailer if the man becomes a poor credit risk and will not meet the manufacturer's bills, or he may have a variety of reasons. The present bill does not touch any of the existing reasons the manufacturer may have for discontinuing his arrangements with the retailer. The point I was making in the context of the remark my hon. friend has just quoted was that the only basis on which the manufacturer could be held to account under the proposed amendment is if he discontinues supplying the retailer with renewal goods because of the fact that the retailer has failed to maintain a price which the manufacturer has set. It is the same point that was raised just a few moments ago by the hon. member for York West; that is, if the manufacturer has some genuine reason outside the terms of the bill for wanting to discontinue his relationship with the retailer he is just as free to do so after the bill has been passed as he was before.


George Alexander Drew: Some point does come where
it is perfectly obvious that any further attempt to tie the minister down to an explanation of this measure which will be in any way understandable simply has to be abandoned. I am satisfied the record will demonstrate that hon. members are

being called upon to adopt a measure which the minister has very clearly shown he does not understand himself, which he has shown beyond all doubt is most uncertain in its application, and which in fact he even tries to leave the impression may have very little effect at all. On the other hand, of course it will always be there as a warning to those he might find occasion to deal with.
To hear the minister at one point one would think this is a stern measure. To hear him at another point one would think this has no teeth in it at all. Recognizing the fact that every answer the minister has given has further confused the issue and demonstrated why this measure should not go through, I can only close by quoting these words from "Alice in Wonderland":
"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean-neither more nor less."
You can almost hear the minister listening to questions across the floor, because in this case Humpty Dumpty was being questioned. I continue with the quotation:
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master,-that's all."
And that is all that is in issue here. We heard before the statement: "If we want to get away with it, who is going to stop us?" At every stage the only real argument we have had is: If we want to get away with it, who is going to stop us? We recognize that we must bow to the weight of this majority.


Charles-Arthur Dumoulin Cannon: I would like to say a word for the record, because the leader of the opposition has referred to the record. I want to say the record will show that the Minister of Justice has answered with unfailing courtesy and patience all the questions, despite interruptions. If there is one thing for which we could reproach the minister it would be for having had too much courtesy for hon. members opposite. And when you talk about the minister not having given explanations, I say the minister has given every explanation asked for. I will say this to the opposition, that they have just pretended not to understand, in order to prolong this debate unnecessarily.


Mr. Wright:: The minister replied to a question of the hon. member for Queens with respect to provincial marketing boards being exempted, so far as this particular legislation is concerned. Could he give us the section of the bill on which he bases that statement? I would like to have something definite about it, something more than the statement the minister made before.
Combines Investigation Act


Stuart Sinclair Garson: I think everyone knows, and I am sure my hon. friend will realize, if he reflects upon it, that the provincial marketing boards never undertake to maintain any resale prices upon the products they sell.


William Earl Rowe: Yes, they do. What do they organize for, then?


James Garfield Gardiner: They sell.


Percy Ellis Wright: If a provincial marketing board in future were to attempt to maintain prices for their products, could they be prosecuted?


Stuart Sinclair Garson: That would not follow, at all.


William Earl Rowe: Why would it not follow?


John George Diefenbaker: Would the minister say whether he got an opinion from the law officers of the crown on that question? Did he receive such an opinion?


Stuart Sinclair Garson: I have already expressed my opinion upon my responsibility as a minister.


John George Diefenbaker: Did you get an opinion
from the law officers?


Stuart Sinclair Garson: I expressed it-


John George Diefenbaker: Did the minister say he had an opinion from the law officers of the crown?


Paul Joseph James Martin: He said he had done it on his own authority, which is the highest in the department.


John George Diefenbaker: That is what I feared. Because I would be very much surprised if they gave my hon. friend any opinion along that line. There is no virtue created as a result of setting up a provincial corporation which places itself above a dominion law. I should have thought the minister would have received more authentic information on the law in this regard than to depend upon himself in a matter of such importance to the farmers of this country.


Percy Ellis Wright: The Minister of National
Health and Welfare has indicated that the Minister of Justice speaks with supreme authority, and that the Supreme Court of Canada must abide by what he says on the floor of the house. I do not think that is a fact. I would like to know what particular section of the act would apply if a provincial marketing board were prosecuted for maintaining prices. Would they find it within their jurisdiction to say that they were not guilty of an offence under this measure?


Agar Rodney Adamson: Would not the flue-cured tobacco association, which maintains a marketing association, be subject to this bill? I

Combines Investigation Act understand they have a very close marketing association, and sell at an agreed price to the tobacco companies.


William Earl Rowe: Interprovincially, too.


Agar Rodney Adamson: Would that not apply to their process of selling?


Stuart Sinclair Garson: No.


Arza Clair Casselman: Does the minister say no?


William Earl Rowe: Would the minister tell us why? If, as the Minister of National Health and Welfare says, you are the supreme judge of the law, then surely you can tell us why?


Some hon. Members:: Carried.


William Earl Rowe: Surely the Minister of Justice can tell us, when he is the supreme authority. These co-operative associations sell interprovincially. Their operations are not confined within a province. If, as the Minister of Health and Welfare has said, you are the supreme authority in all these things, then we, the common people, would like to know about it.


Mr. Fair:: Many of us have done a lot of work in setting up marketing organizations all over Canada. We should find out just what the authority of this legislation is.


William Earl Rowe: We want to know.


Robert Fair: We do not want any of the marketing organizations to be destroyed by this or any other amendment. While I have supported this amendment, still I want to make sure it will not be detrimental to the interest of those organizations. I would ask the minister to give us the information asked for by the hon. member for Melfort.


James Garfield Gardiner: Mr. Chairman, I do not think there are any farmers' co-operative organizations that set up resale prices. Farmers' co-operative organizations do sell their products to distributors, who sell the products at whatever prices they themselves decide. 'The co-operatives do not set a resale price. They may set a price at which they are going to sell to someone else, but they do not establish resale prices. Those boards which are set up in provinces are set up under provincial legislation. The boards which are required to carry on interprovincial activities are set up here, under federal law. I do not think that there is any way in which co-operative organizations, as at present set up, can be affected by this particular legislation. You have already had that opinion from the minister. I do not think there is any reason whatsoever for delaying the legislation further.
As a matter of fact I have had representations from many if riot all of the farm co-operative organizations right across Canada 
asking us to get this legislation through, as rapidly as we can, and not do anything to delay it.


William Earl Rowe: That is more of an agricultural interpretation than a legal one.


James Garfield Gardiner: Sometimes they are better than the legal opinions.


Percy Ellis Wright: I am fully aware of the rules of certain farm organizations with respect to the resale of their products. If I am correctly informed, for instance, the seed corn producers in Ontario have an organization for the marketing of seed corn. They set the price at which the seed is to be sold by the dealers who sell the corn for them. If that is a fact, would they be contravening this particular amendment?


James Garfield Gardiner: If they do that, they do it because the constitution provides that in such cases the province has the authority. There is no way in which they can be prosecuted for doing it.


Percy Ellis Wright: This act overrides any provincial act, surely?


James Garfield Gardiner: No; where the constitution gives authority to the province, it does not override it.


Percy Ellis Wright: Does the Minister of Justice agree with that? Does the Minister of Justice agree with what the Minister of Agriculture has just said?


George Alexander Drew: No.


William Earl Rowe: We have asked the Minister of Justice for a legal interpretation, but we have received only an agricultural interpretation from the Minister of Agriculture. As the hon. member has said, we have in Canada the seed corn producers from whom every spring I buy com for my farm. Then we have the flue-cured tobacco people. It is more important for co-operatives than it is for any individual, because there are great numbers of these co-operatives. I think the co-operatives of this country have been of keen political concern to the government in connection with taxation and other issues. It is most important that we should know at this stage how this legislation will apply. There is no escaping the fact that they fix their retail prices and that they sell interprovincially and internationally flue-cured tobacco and high grade seed corn. If this is going to be applicable to the individual it will surely be applicable to the co-operatives. What about the pools? The same thing will apply there.


James Garfield Gardiner: No.


William Earl Rowe: The minister may have some different idea because he has had a lot to do with them.


Arza Clair Casselman: Just withdraw the bill.


Stuart Sinclair Garson: When this bill was first considered it was upon the basis that it would not be applicable to any of these marketing boards, and that in its administration it would not interfere with their operations. I think it will be found in the case of tobacco or seed corn or wheat or any of these products that they go into commercial channels and then lose their identities.


William Earl Rowe: Why do they lose their identities? What is in the bill to make them lose their identities?


Stuart Sinclair Garson: Take a concrete case where resale price maintenance applies. If a manufacturer sells a hat to a retailer and attaches a resale price, that hat must be sold to the consumer at a certain price. However, tobacco would go to a manufacturer of tobacco products and would lose its identity when it was manufactured into cigarettes. I am quite certain that the people who sell tobacco do not dictate to the manufacturer the price at which he shall sell cigarettes.


William Earl Rowe: In other words, if you sell a suit with the hat, the hat would lose its identity.


Stuart Sinclair Garson: I am just speaking about the products my hon. friend referred to. There is no way of preserving the identity of goods such as are sold by most of these boards.


Joseph-Alfred Dion: Shall the section carry?


Some hon. Members:: No.


Alphonse Fournier: If I may make a suggestion, I wonder if we could get this bill through tonight. It looks as though everyone is in good humour and perhaps we could continue a little after ten o'clock.


Some hon. Members:: Agreed.


George Alexander Drew: I have indicated already that in view of the fact that closure was applied earlier in the day and that we have now discussed this matter in committee for the length of time we have, we certainly do not intend to attempt further to unravel the double-talk we have heard. For that reason we are quite agreeable that this measure should proceed because we recognize that with the government having the majority it has and determined to deal with this matter as it has indicated, we have exhausted every possibility of obtaining a reconsideration of this measure by the government, except one which we shall deal with in a moment.


Joseph-Alfred Dion: Shall section 1 carry?


Some hon. Members:: On division.
Section agreed to on division.
Combines Investigation Act
On section 2-Evidence.


Joseph-Alfred Dion: Shall the section carry?


Some hon. Members:: On division.
Section agreed to on division.


Joseph-Alfred Dion: Shall I report the bill?


Some hon. Members:: On division.
Bill reported on division.


Stuart Sinclair Garson: the third reading of the bill.


George Alexander Drew: Mr. Speaker, as I indicated before, it is obvious that there is no advantage in further debate on this measure and I propose to move that this bill be not now read a third time. I do with the utmost earnestness urge members of this house, and particularly members on the other side, to recognize that during the whole of this committee discussion the evidence has mounted that the government has not yet adequately considered this measure.
The explanations given by the Minister of Justice (Mr. Garson) are most conflicting misinterpretations of the real effect of this bill. I hope hon. members will look over the record and see the number of occasions the minister has directly contradicted himself as to the effect and application of this measure. I do not intend to pursue this. I only repeat that at one time the minister has sought to convey the impression that the bill would harm no one, and at another time that it was a stern measure designed to deal with people who were injuring the Canadian consumer.
It has been double-talk from the time we went into committee, as it was double-talk prior to that time. There has been no explanation given by the minister as to why this measure would not apply to agricultural organizations which are marketing products on a large scale. There has been no attempt by the minister to explain why marketing organizations right across the country engaged in every stage of marketing and establishing prices which they believe will be to the advantage of the producer will not come under the blanket prohibitions of this bill. There has been no evidence whatever why simple safeguards for the person who is harming no one should not be included. No reason has been given why there should not be an exception in the bill to provide that its provisions will apply only where what is done is contrary to the public interest or has unduly raised prices, as is included in the Combines Investigation Act and in the section of the Criminal Code which deals with a similar subject.

Combines Investigation Act
With all these facts before us; with all the evidence that has accumulated that the Minister of Justice (Mr. Garson), who presents this bill, is not able to indicate to us that it contains safeguards or in fact will be effective for the purpose for which it has been said it was designed, I am moving an amendment as no mere delaying device but as a means of placing before the house the suggestion that the dignity of parliament be preserved by refusing to pass this measure into the law of the land now with so little evidence before us as to what its real effect will be. Therefore I move, seconded by the hon. member for Kamloops (Mr. Fulton):
That Bill No. 36 be not now read a third time, but that it be read a third time this day six months hence.


Mr. McCubbin:: I was paired with the hon. member for Middlesex East (Mr. White). Had I voted, I would have voted against the amendment.


Mr. Henderson:: I was paired with the hon. member for Prince Edward-Lennox (Mr. Tustin). Had I voted, I would have voted against the amendment.


Jean-François Pouliot: I was paired with the hon. member for Chicoutimi (Mr. Gagnon). Had I voted, 1 would have voted against the motion.


Mr. Speaker:: Is it the pleasure of the house to adopt third reading of this bill?


Some hon. Members:: No.


Mr. Speaker:: All those in favour of the motion for third reading of the bill will say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.
And more than five members having risen.


Mr. Speaker:: Call in the members.


Mr. Speaker:: Is it agreed that the bill do pass and that the title be as on the order paper?


Some hon. Members:: Agreed.


Some hon. Members:: On division.


John Sylvester Aloysius Sinnott: Speaking for the record, may I say that there were only twenty-six Tories present.
Fleming
Fraser
Fulton
Gibson
Graydon
Hees
Hodgson
Lennard
Macdonnell (Greenwood)
McLure
Nowlan
Ross (Souris)
Rowe-27.
Business of the House
Bill read the third time on division and passed.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.
He said: Now that we have disposed of this bill which seemed to be a little bit contentious, we could take up something where there would be less contention. That would be the resolution in the name of the Secretary of State for External Affairs (Mr. Pearson), under government notices of motions. The second item we would wish to proceed with would be the resolution of the Minister of Agriculture (Mr. Gardiner); and if the house agreed we would proceed with the various stages of the bill. I understand that my colleague, the Minister of Agriculture, has consulted the members of the various parties and that this measure is not contentious. Then we would take Bill No. 26, to amend the Public Works Act. That measure was contentious some time ago. It was discussed one afternoon. I think I would be wise in moving an amendment to that bill.


Donald Methuen Fleming: I think you would.


Alphonse Fournier: I think we will all agree in no time on that bill.


Gordon Graydon: Page the Minister of Justice (Mr. Garson).


Alphonse Fournier: Then we should like to proceed with Bill No. 15, to provide for privileges and immunities in respect of the North Atlantic Treaty Organization. The other measures I do not think-


Arza Clair Casselman: Oh, withdraw them.


Alphonse Fournier: We probably would not withdraw them but would wait until the next session. That was suggested. Perhaps it would be possible to complete our work sometime tomorrow and perhaps prorogue during the evening, but we would have to have some procedures completed before that hour. If people are in as good humour as they are right now, I think we could succeed in doing that.


Arza Clair Casselman: Monday, anyway.


George Alexander Drew: Just before you rise, Mr. Speaker, I would point out that there are a number of questions on the order paper, and it is possible that an inquiry in the morning might produce the information that these questions can be answered. I would suggest that in any cases where the answers are now ready, they be made available tomorrow.


Alphonse Fournier: That is agreeable, Mr. Speaker.


Arza Clair Casselman: That is a bigger percentage than you have.
Motion agreed to and the house adjourned at 10.30 p.m.

Saturday, December 29, 1951